Oracle's $664 Billion Backlog Is Finally Starting to Convert, Analyst Says

Oracle Corp (NYSE:ORCL) Thursday reported upbeat fiscal first-quarter results.

Here are some key analyst takeaways:

• Guggenheim Securities analyst John DiFucci reiterated a Buy rating and price target of $400.
• Citizens JMP Securities analyst Patrick Walravens maintained a Market Outperform rating and price target of $285.
• Stephens analyst Brett Huff reaffirmed an Equal Weight rating and price target of $175.
• Cantor Fitzgerald analyst Thomas Blakey maintained an Overweight rating and price target of $284.
• DA Davidson analyst Gil Luria reiterated a Buy rating and price target of $225.

Check out other analyst stock ratings.

Guggenheim Securities: Oracle reported strong quarterly results, with total revenue of $19.3 billion and non-GAAP earnings of $1.92 per share coming in higher than consensus estimates of $19.2 billion and $1.74 per share, respectively, DiFucci said in a note.

Cloud Services revenue, which includes IaaS and SaaS, grew by 61% in constant currency terms to $11.6 billion, topping consensus of $11.5 billion, the analyst stated. "ORCL signed more than $30B in new AI infrastructure contracts which further diversified its customer base across a diverse set of data center campuses," he further wrote.

Citizens JMP Securities: Oracle’s revenue grew 30% year-on-year and 21% sequentially to $19.3 billion, topping consensus of $19.1 billion, Walravens said. Operating margin of 42.5% came in higher than estimates of 40.9%, he added.

Oracle Cloud Infrastructure (OCI) growth accelerating to 121% year-on-year, from 93% in the previous quarter, was "impressive," the analyst stated. While management’s second-quarter guidance came in-line with expectations, they raised their fiscal 2027 projection to revenue of $90 billion, implying around 34% growth and non-GAAP earnings of $8.10 per share, both of which were higher than consensus estimates, he further noted.

Stephens: Oracle reported a modest beat across most metrics, Huff said. The company hit record totals and cloud revenues, both in absolute dollar terms and on a growth basis, he added.

With demand continuing to outpace supply, Oracle booked more than $30 billion of additional AI cloud contracts in the first quarter, pushing RPO (remaining performance obligation) to $664 billion, the analyst stated. Management raised their fiscal 2027 pro forma earnings guidance by 5 cents per share, he further noted.

Cantor Fitzgerald: This was the first time in Oracle’s history that it grew revenues sequentially from the fourth quarter, Blakey said. While revenue growth was strong, at 30% year-on-year, gross margin came under pressure due to "the ongoing data center ramp and mix shift toward infrastructure," he added.

Capex of $28.5 billion in the first quarter was significantly higher than Street’s estimate of $19.3 billion, the analyst stated. The company’s reaffirmation of its fiscal 2027 capex of $90-$95 billion indicates that "Oracle continues to fund its build disproportionately with customer and supplier capital," he further wrote.

DA Davidson: Oracle’s results exceeded expectations on both revenue and earnings, Luria said. RPO increased by $26 billion sequentially to reach $664 billion, he added.

"Importantly, RPO conversion is beginning to inflect higher as Oracle executes against its capacity buildout, deploying approximately 850 MW of capacity during the quarter, nearly 75% of FY26’s total capacity additions," he further wrote.

ORCL Stock Price Activity: Oracle shares were up 0.73% at $154.06 on Friday, according to Benzinga Pro data.

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