Jefferies Reiterates Buy Rating on Oracle

Jefferies analyst Brent Thill reiterated a Buy rating and $320.00 price target on Oracle (NYSE: ORCL).

“Clean beat across the board, with backlog of $553B (325% growth), IaaS CC growth of 81%, total rev CC growth of 18%, and 42.9% opm all ahead of Street.

FY26 rev and capex guides were reiterated, while FY27 rev guide was raised $1B to $90B (implies 34% growth).

SaaS grew 11% in CC (slightly below Street at 12%), with growth decels in both Fusion/NetSuite. Capex was $18.64B in F3Q vs $12.03B in F2Q. Snapshot of key results below.

Backlog was $553B (325% y/y growth), up 6% q/q (~$29B q/q) vs.

15% in F2Q26 and 230% q/q in F1Q26. On a y/y basis, backlog decelerated vs.

438% y/y growth in F2Q.

Mgmt highlighted that most of the q/q increase in RPO is related to large scale AI contracts where ORCL does not expect to have to raise any incremental funds to support these contracts (customers either prepay so ORCL can procure GPUs, or they directly purchase and provide the GPUs themselves).

F3Q results. Total rev of $17.19B, up 22% y/y and 18% y/y CC, was slightly above Street estimates of $16.918B (19.7% y/y growth). Operating margin of 42.9% was marginally above Street’s 42.6%.

Operating cash flow of $7.15B was above the Street estimate of $6.352B, and current deferred revenue of $9.881B was below the Street’s $10.19B.

Non-GAAP EPS of $1.79 was above Street estimates of $1.70. Cloud growth, which includes SaaS and IaaS, was 41% y/y in CC vs 33% y/y in F2Q.

IaaS was above expectations, growing 81% y/y in CC vs Street estimates of 79%. SaaS was slightly below expectations, growing 11% y/y in CC vs Street estimates of 12%.

Within back-office strategic SaaS, Fusion grew 14% y/y in CC vs 17% in F2Q, and NetSuite grew 11% y/y in CC vs 13% in F2Q. MultiCloud database revenue grew 531% y/y vs.

817% in F2Q, and remains the fastest growing business though at much smaller scale. Guidance. ORCL reiterated its FY26 revenue and capex guidance of $67B and $50B, respectively.

Notably, the company raised its FY27 total revenue outlook to $90B (vs. prior $89B). For F4Q, ORCL is guiding to 18-20% y/y total revenue growth in CC (19-21% reported), implying an acceleration vs.

F3Q at the midpoint. Total Cloud revenue is expected to grow 44-48% CC in Q4, up from 41% CC in F3Q.

Capex was $18.635B vs $12.033B in F2Q, or up 55% q/q and above the implied quarterly expectations based on its guidance of $50B capex in FY26. Q4 implied capex would be ~$10.8B.

Capital Funding Progress. ORCL is demonstrating tangible execution on its previously announced up to $50B financing plan.

Within days of the February announcement, the company secured $30B via a mix of investment-grade bonds and mandatory convertible preferred stock, supported by a record, materially oversubscribed order book signaling strong investor demand for ORCL’s AI/ cloud buildout.

Importantly, management noted they do not expect to issue additional bonds beyond this $50B amount in CY26, while the ATM equity component remains untapped preserving further flexibility as infra investment scales.”

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