Oracle's Cloud Boom Is Just Getting Started

Oracle (NYSE: ORCL) has been speaking to the markets for the last two years, and it is time to start listening. The rise of AI has altered its trajectory so significantly that its share price is expected to rise by triple digits over the next year or two. The reason is that the shift to cloud-based services, which began before the pandemic, was supercharged by its impact on society and later again by AI, to which its operations are well-suited. 

Among the critical details emerging in fiscal 2025 were new and expanding partnerships with the three primary hyperscalers, which have solidified its position as the leading provider of database-related services and are crucial to AI infrastructure globally. Another is its lean into hyperscale activity and the expansion of its data center network. Oracle is building some of the planet's largest, most advanced AI-capable data centers. 

Statistics that put the impact of these developments into perspective include the 115% sequential increase in revenue from hyperscalers, accelerating growth across its cloud footprint, and the forecast for its global data center footprint to grow by 105% over the next 12 months, which is game-changing news for this business. 

Oracle Stuns Market With FQ4 Results and 2026 Guidance 

Oracle’s Q4 release and guidance affirmed the strength foreshadowed by results earlier in the year. Accelerating deals and the growing RPO resulted in an 11.3% increase in revenue. The $15.9 billion reported is 200 basis points ahead of MarketBeat’s reported consensus and driven by strengths in all reporting segments. 

Segmentally, Cloud Services and License Support grew by 16%, while Cloud Licenses and On-premise Licenses grew by 9%. Breaking it down further, total cloud revenue grew by 27%, based on the strength of IaaS and SaaS revenue streams. IaaS (infrastructure as a service) grew by 52%, accelerating sequentially and YOY, while SaaS (software as a service) grew by 12%. Cloud Fusion ERP also performed strongly at 22%, followed by an 18% growth in NetSuite Cloud. 

Margin is another area of strength. The company experienced margin compression, but the impact was minimal and less than forecasted. The net result is a modest single-digit increase in operating income and better-than-expected adjusted earnings per share (EPS).

The $1.70 in adjusted EPS is up $0.07, or about 4.3%, compared to the prior year, more than a nickel or 365 basis points ahead of expectations, and the strength is expected to intensify in 2026.

The guidance is the catalyst for this stock’s price movement. The company issued a robust guidance forecasting revenue and earnings growth to be “dramatically higher.”

What that means is roughly $67 billion in net revenue, up nearly 17% YOY driven by a 70% increase in cloud infrastructure. The growth will be aided by the expanding global footprint and increasing capacity usage. The takeaway is that hyperscaler revenue growth will continue at a high triple-digit rate for at least another year, underpinning strength in all other segments. 

Oracle’s Analyst Price Targets Revisions Shift Into Higher Gear

The analysts' trends supporting Oracle’s share price were positive before the release and shifted into overdrive following it. MarketBeat tracked more than 20 revisions within the first twelve hours of the report, with 100% of them increasing their target. The average increase is approximately 35%, and the new range has set a new high end for the market.

Among the critical details is that all revisions are at or above the consensus level, averaging $220, representing a 25% gain relative to the pre-release closing price. The high end of the range is now $266, a 50% gain when reached. 

The price action aligns with an upwardly moving market. The share price of Oracle stock rose about 10% in premarket trading, aligning with its all-time highs. The question is whether the market will move to a new all-time high, and it is likely to happen within days, if not the day after the release.

Because of the technical setup, this stock's market could easily reach the high end of the analysts' range. When used as a projection for targets, the magnitude of the correction and rebound suggests that this market will reach $280 within the next few quarters. 

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