Jefferies Hikes Oracle Target to $220, Cites AI-Driven Cloud Acceleration

Jefferies raised its price target on Oracle (NYSE:ORCL) from $200 to $220 on June 12, maintaining a Buy rating as the company continues to ride strong momentum in cloud infrastructure and AI services.

Jefferies’ analyst’s research note pointed to a sharp acceleration in Oracle’s cloud growth expected in fiscal 2026. Total cloud revenue is projected to rise 40%, up from 24% in FY25, while IaaS revenue is forecast to jump 70%, compared to 51% the year prior. The analyst sees this as evidence of a widening supply-demand imbalance in cloud capacity, an environment Oracle is increasingly equipped to benefit from.

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Financially, the company remains solid: $57.4 billion in revenue over the last twelve months and a gross margin of 71%. However, Q4 results were mixed; SaaS beat expectations, but IaaS fell short. Jefferies downplayed the miss, noting that broader fundamentals and long-term positioning remain intact.

What’s driving the firm’s optimism is Oracle’s backlog growth (RPO), which it believes could convert into revenue and support upside even at 32x 2026 EPS. Oracle’s expanding role in the AI infrastructure race, backed by customer demand for scalable, non-Nvidia alternatives, remains central to the bull case.

Jefferies’ call paints a picture of Oracle not just participating in the AI buildout, but quietly becoming one of its backbone providers. Last month we shared the details of ORCL’s $40 billion NVDA chips investment plan in another article.

While we acknowledge the potential of ORCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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