Freedom Broker Lowers Oracle Price Target to $205

Freedom Broker analyst Egor Tolmachev lowered the price target on Oracle (NYSE: ORCL) to $205 (from $210) while maintaining a Buy rating.

“FQ1’27 was the quarter in which Oracle’s AI build stopped being a pure act of faith.

The backlog beat, infrastructure revenue more than doubled, and — for the first time since the build began — the funding position improved rather than deteriorated, with the entire $20bn equity program absorbed inside a single quarter and net debt falling despite record capital spending.

The market read it the same way: shares that went into the print near their lows reversed sharply higher on relief that the cash position was less fragile than feared.

Our reservation is that the relief is anchored on the backlog level, while the more informative series sits underneath it.

Gross bookings and the sequential backlog addition both fell heavily against a spectacular prior quarter, and management’s guidance raise was conspicuously smaller than the beat it followed.

Nor did the quality of the earnings match the headline: gross profit grew at roughly half the rate of revenue, the operating margin was held flat only by cutting costs below the gross profit line, and a lower tax rate and below-the-line income supplied a meaningful slice of the reported upside.

None of this breaks the thesis. Oracle is demonstrably converting contracted capacity into revenue, and doing so while renewing four-year-old GPU capacity at a premium.

But the proof points have shifted rather than been delivered, and we expect the October Investor Day, not this print, to settle the argument.

We reiterate our Buy rating, but slightly decrease the price target to $205.”

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