Oracle Gains After Jefferies Raises Price Target on AI and Cloud Growth

Oracle (ORCL, Financials) is getting fresh attention from Wall Street after Jefferies raised its price target on the stock to $400 from $360, citing stronger momentum in the company's AI and cloud businesses.

In a note to clients, Jefferies said Oracle is entering a new growth phase, as it benefits from surging demand for AI infrastructure and steady adoption of its cloud platform. Analysts believe Oracle's integrated One-Oracle approachtying together its database, applications, infrastructure, and AI toolspositions the company well against cloud leaders like Amazon and Microsoft.

Jefferies argued that Oracle's new long-term ambitions were proof that the firm had changed. The company predicts that its revenues would increase up by over four times, to $225 billion by the end of fiscal 2030. This is a 31% annual growth rate. Oracle Cloud Infrastructure is its fastest-growing segment, and it is predicted to bring in $166 billion in revenue at a rate of 75% each year.

Earnings per share might also go up by 28% a year to $21.The analysts acknowledged rising capital spending will be needed to meet those goals but said the near-term costs are outweighed by Oracle's expanding AI partnerships and customer demand. The report added that Oracle now looks like an emerging hyperscaler in the global cloud race.

Oracle shares were up about 3% in early trading as investors responded to the upbeat outlook and raised confidence that the company's cloud strategy is gaining traction.