Jefferies Raises Oracle Price Target to $220 on Strong AI Growth Expectations

Wall Street continues to pay attention as Jefferies raises its price target on the stock to $220 from $200, maintaining its “buy” rating on the tech giant. The move comes after Oracle reported better-than-expected fourth-quarter financial results that highlighted clear signs of growth in its cloud infrastructure and artificial intelligence (AI) businesses.

Oracle shares are currently trading at $213.70, with a market capitalization of nearly $600 billion. Over the past 12 months, the stock has risen more than 45%, reflecting growing investor confidence in the company’s cloud and AI strategy.

RPO growth and impressive 2026 outlook
Jefferies highlighted that Oracle is delivering impressive 41% RPO growth, and the company is targeting over 100% growth in FY26, not counting major initiatives such as Stargate, a strategic project to expand its AI infrastructure.

Notably, Oracle’s IaaS revenue is expected to grow 70% in FY26, up from 51% last year. Gross margin remains steady at 71%, indicating stable operating efficiency and sustainable profitability.

Mixed results but still optimistic outlook
Although the fourth quarter report showed a divergence between business segments with SaaS exceeding expectations while IaaS fell short, Jefferies remains confident in the long-term potential. With RPO growth momentum and AI strength, Oracle stock is valued at 32 times 2026 earnings estimates, reflecting the prospect of sustained growth in the global AI infrastructure market.

Major organizations raise price targets
Not only Jefferies, many other analysis organizations also raised Oracle stock price targets:

BNP Paribas Exane: Raised target to $226, maintained "Outperform" rating.

UBS: Raised target to $225, emphasized the forecast of backlog exceeding $275 billion by 2026.

DA Davidson: Raised target to $170, appreciated Oracle Cloud Infrastructure (OCI)'s rapid growth.

Cantor Fitzgerald: Raises Target to $216, Highlights IaaS Revenue Growth Forecast of Over 70% in 2026

Strategic Partnership with AMD Boosts AI Computing
Oracle recently partnered with AMD (NASDAQ: AMD) to integrate the Instinct MI355X GPU into its cloud infrastructure. This will enhance AI performance, optimize costs, and improve networking capabilities – a key factor in handling complex AI workloads.

Oracle management forecasts 16% constant-currency revenue growth in fiscal 2026, with OCI revenue expected to reach $20–25 billion per year by the end of this period.

Despite Risks, AI Outlook Remains a Key Catalyst
Despite concerns about potential profit erosion due to heavy investment in AI infrastructure, analysts remain positive on Oracle stock. Demand for AI infrastructure is growing rapidly, and Oracle is well-positioned to ride the wave.

According to InvestingPro, Oracle maintains a “Good” financial health rating, along with strong earnings performance and price momentum.