Wolfe Research Raises Oracle Price Target to $225

Wolfe Research analyst Alex Zukin raised the price target on Oracle (NYSE: ORCL) to $225.00 (from $215.00) while maintaining an Outperform rating.

“ORCL delivered an all around banger in F4Q with accelerating revenue, cloud, RPO, and IaaS growth, reiterated long term targets with lower than “we” expected cash capex for FY27.

While BYOH (bring your own hardware) and prepaid deals required a bit more explanation around RPO growth and profitability, we think the strategy is solid.

Revenue grew 21% Y/Y, with IaaS growth of 92% Y/ Y CC, and RPO of $638B (+363% Y/Y), with ORCL signing $67B of AI infrastructure contracts, with BYOH/prepaid contracts now $75B of RPO (implies 67% share of F2H26 RPO growth). On our callback, management noted four customers signed $8B+ contracts in the quarter and that it continues to diversify across large and smaller customers while seeing GPU utilization of 97.5%.

Importantly, management explained in detail that BYOH provides financial flexibility enabling customers with lower cost of capital help fund hardware purchases, allowing ORCL to monetize secured capacity faster, reducing the risk of carrying lease and power costs without offsetting revenue.

Management noted that BYOH/prepaid deals have no margin degradation, with some supporting better ROIC and PnL impacts.

We think results also helped weaken the SaaS-pocalypse thesis, with ORCL seeing forward indicators growing faster than revenue with SaaS deferred revenue up 16% Y/Y, as previous delayed decision timing improved.

Additionally, multicloud database revenue grew 404% Y/Y, with bookings up 325% Y/Y, reinforcing confidence in ORCL’s full stack positioning across apps and data, while also being a positive readthrough for other multi-cloud database names (MDB).

On CapEx, ORCL expects ~$70B of FY27 net cash outlay and $20-$25B of customer prepayments supporting $90-95B in total FY27 CapEx, with ~$40B of financing needed in FY27, including $20B in its untapped ATM facility.

We remain positive in ORCL’s LT product cycle and growth story, especially with attractive risk-reward at 23x GAAP CY27 P/E. Reiterate OP and PT.”

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