On Tuesday, Oracle Corporation (NYSE:ORCL) saw its price target increased by Piper Sandler from $122.00 to $140.00, while retaining an Overweight rating on the stock. The adjustment comes after a notable uptick in the company's cloud revenue performance indicators.
The firm's decision was influenced by Oracle's recent cRPO (current remaining performance obligations) growth, which surged to 15% year-over-year, a significant increase from 7% in the previous quarter. This growth is a strong indicator of Oracle's renewed momentum in the cloud sector, following a period of underwhelming cloud results in the two quarters prior.
Piper Sandler expressed confidence in Oracle's potential for revenue acceleration, anticipating a return to double-digit growth. This outlook is further supported by the company's robust operating margins, which are expected to remain above 40%. The firm's optimism is bolstered by Oracle's stable Infrastructure as a Service (IaaS) growth, which recorded a 49% increase, closely aligned with the 50% growth observed the preceding quarter.
The stabilization of Oracle's IaaS growth is attributed to the easing of constraints around new data center capacity. This development is seen as a positive sign for the company's cloud infrastructure services and their contribution to Oracle's overall business growth.
Piper Sandler's maintained Overweight rating reflects their ongoing positive stance on Oracle's stock, underpinned by the company's improving cloud services performance and the broader financial outlook.
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