Oracle Corporation’s Recent Developments
Oracle Corporation (NYSE: ORCL) is certainly on the radar for investors. Recently, UBS analyst Karl Keilstedt adjusted his price target for Oracle down to $325.00 from $380.00, yet he still maintains a Buy rating. This move comes amid mixed financial results, particularly given Oracle’s massive $523 billion backlog.
In the earnings report released on December 11, the company noted that results slightly missed investor expectations. That said, the outlook remains surprisingly optimistic, buoyed by the hope that the substantial backlog will lead to notable revenue growth down the line.
“While Oracle’s results from November, showcasing a 13% revenue growth and a remarkable 66% growth in cloud infrastructure, fell a bit short of what investors were hoping for, we believe there’s still a solid argument for the $523 billion backlog resulting in strong turnover growth in late 2027, which justifies our Buy rating.”
Interestingly, the stock price has recently become less responsive to the growing backlogs, which is a shift from three months ago. This change is notable despite a hefty $68 billion rise in remaining performance obligations tied to transactions with Meta and Nvidia. Investors seemingly want to see that backlog growth transform into real profits.
“It’s crucial for investors to observe that backlog growth and capital expenditure leads to actual results. The 13% growth in overall rotations indicates progress, albeit up from 9% last year. However, the 66% growth in cloud infrastructure is contrasted by the SaaS growth of just 11%, which didn’t meet Oracle’s own guidance, nor did the cloud turnover growth match the company’s earlier Q3/February projections of 37% to 41%. It’s worth noting this is slightly lower than the previously expected 42%.”
Oracle Corporation specializes in database management and cloud services. While there’s a recognition of ORCL’s investment potential, some believe that certain AI stocks might offer better upside and reduced risk. For those intrigued by lesser-known, undervalued AI stocks that could thrive under current trends, there are resources available for further exploration.
Disclosure: None.
