Stifel Reduces Oracle (ORCL) Price Target Following Earnings Report, Keeps Buy Rating

Oracle Corporation (NYSE:ORCL) continues to draw attention among AI-focused investors. On December 11, Stifel analyst Brad Reback reduced the stocks price target from $350 to $275, while reaffirming a Buy rating. The adjustment comes after Oracle released its second-quarter financial results.

Despite strong demand for its AI infrastructure, Oracle posted quarterly revenue below analyst expectations. The company reported earnings per share of $2.26, surpassing the anticipated $1.64. Revenue reached $16.06 billion, slightly under the forecasted $16.21 billion.

Looking forward, Oracle projected adjusted earnings per share between $1.70 and $1.74, along with revenue growth of 19% to 21% for the fiscal third quarter. Analysts surveyed by LSEG had expected $1.72 per share and $16.87 billion in revenue, implying 19% growth.

Stifel characterized the quarter as lackluster, noting a modest 15% quarter-over-quarter increase in RPO growth, which was overshadowed by higher-than-expected capital expenditure plans. The company raised its fiscal 2026 capital expenditure guidance by $15 billion, totaling $50 billion, raising questions about funding for data center expansion.

Management emphasized its commitment to maintaining an investment-grade credit rating and indicated that multiple funding options are available. Oracles Infrastructure as a Service (IaaS) revenue of approximately $4.1 billion met expectations but did not surpass them. Adjusted EPS, excluding Ampere contributions, appeared 1015 cents below guidance.

Despite short-term concerns, Stifel believes that the companys ongoing capital investments are likely to support accelerated Oracle Cloud Infrastructure (OCI) growth in upcoming quarters. This growth is expected to be driven by a broader and more diverse IaaS customer base, potentially enhancing EPS growth in fiscal 2027.

Oracle Corporation operates as a database management and cloud service provider. While the stock shows investment potential, some AI-focused alternatives may offer higher upside with lower risk.

Sources:

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

Author: Ethan Caldwell
Ethan Caldwell is an experienced reporter with 10 years covering international news. He specializes in politics and economics, with strong investigative journalism and analytical writing skills.