Stifel Cuts Oracle (ORCL) Price Target After Earnings, Maintains Buy Rating

Oracle Corporation (NYSE:ORCL) is one of the AI Stocks Analysts Are Watching Closely.  On December 11, Stifel analyst Brad Reback lowered the price target on the stock to $275.00 (from $350.00) while maintaining a “Buy” rating. The price target cut follows Oracle’s Q2 earnings report.

The AI bellwether reported lower quarterly revenue than expected despite booming demand for its artificial intelligence infrastructure.

Oracle reported earnings per share of $2.26, beating expectations of $1.64. Meanwhile, revenue came in at $16.06 billion, slightly below the anticipated $16.21 billion.

Looking ahead, the company called for $1.70 to $1.74 in adjusted earnings per share and 19% to 21% revenue growth for the fiscal third quarter. Analysts polled by LSEG included $1.72 in earnings per share and $16.87 billion in revenue, implying 19% growth.

Stifel noted a “lackluster print” for Oracle, with modest improvement in RPO growth of 15% quarter-over-quarter overshadowed by considerably higher than anticipated capital expenditure plans.

Meanwhile, the increase in fiscal year 2026 capital expenditure guidance by $15 billion to a total of $50 billion has raised concerns about how the company is going to fund its data center expansion.

According to the management, the company remains committed to maintaining an investment-grade credit rating and highlighted that it has various funding options.

Infrastructure as a Service (IaaS) revenue of an estimated $4.1 billion met expectations but didn’t exceed it, noted Stifel. Meanwhile, EPS, excluding the Ampere benefit, appeared to be 10-15 cents below guidance.

Despite near-term concerns, the firm believes that current capital investments are likely to support accelerating Oracle Cloud Infrastructure (OCI) growth in coming quarters. This will be supported by the company’s expanding and increasingly diverse IaaS customer base, leading to potentially improved EPS growth rates in fiscal year 2027.

Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.

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