Barclays Raises Oracle Price Target to $240

Barclays analyst Raimo Lenschow raised the price target on Oracle (NYSE: ORCL) to $240.00 (from $230.00) while maintaining an Overweight rating.

“Last year, when Oracle shares hit all-time highs on the back of the large announced AI contracts there was little detail available and the excitement just came from the large RPO numbers.

The past few months were a lot tougher as investors worried about what all could go wrong in terms of customer concentration, ability to finance the necessary CapEx, management’s ability to deliver on these contracts, the gross margin profile of these contracts, etc.

We do understand that investors need to ask all these questions but we also have to acknowledge that we are getting more and more answers.

We already got the financing announcement in recent weeks, the new financing round for OpenAI and ORCL’s continued bookings strength is reducing the customer risk and this quarter addressed the CapEx (no negative upside surprises), GM (a 32% base rate for AI infra this quarter) and execution questions (raised guidance from more data center capacity becoming operational as planned).

In other words, with fundamentals becoming more visible, we can start looking at fundamental valuations again.

The ~16x PE ratio (CY27) for a company that will grow revenue and earnings over 30% in the coming years seems very attractive to us and we maintain our Overweight rating and raise our price target to $240 (from $230).”

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