On Tuesday, Barclays showed confidence in Oracle Corporation (NYSE:ORCL) by increasing its price target for the company's stock to $147 from $140, while maintaining an Overweight rating. This adjustment follows Oracle's solid performance in the third quarter, which was marked by slightly better growth in applications and infrastructure.
The analyst from Barclays highlighted Oracle's higher capital expenditures in the third quarter, which amounted to $2.1 billion, with an anticipated increase to $10 billion for the fiscal year 2025. This significant investment in Capex is seen as a move to bolster Oracle's cloud capabilities.
In addition to the capital expenditure figures, the analyst noted the healthy growth in Oracle's Remaining Performance Obligations (RPO). The RPO growth is considered a positive indicator of the company's future cloud growth prospects.
Oracle's recent quarterly results have drawn attention not only to the company's current financial health but also to its strategic investments that are expected to drive future growth. The raised price target by Barclays reflects a positive outlook on the company's direction, especially in the expanding cloud sector.
The analyst's comments suggest that while the third quarter results were solid, investors are likely to be more interested in the implications of Oracle's increased spending on capital expenditures and the robust RPO growth for the company's future in the cloud industry.
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