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Oracle Shares are Climbing After Results. What Wall Street Analysts are Saying Now.

Dow Jones
2 hours ago

Oracle stock is rising on Friday after a rosier forecast after its AI bet appears to be paying off.

Oracle shares were climbing on Friday after the cloud and software group delivered a solid quarter and lifted earnings and revenue forecasts, but to somewhat mixed reviews on Wall Street.

While the stock (ORCL) rose 6% in premarket trading, Morgan Stanley analysts pointed to pressure on Oracle's gross margin and a modest bump in 2027 earnings-per-share guidance. Analysts led by Sanjit Singh said they want to see more stabilization of gross margin and details on when new data centers will be up and running. They will be watching out for updates at Oracle's analyst day expected in late October.

Taking a more positive view, JPMorgan analysts pointed to an August quarter that they said eased key worries concerns around datacenter delays, and the value of Oracle's signed contracts not yet converted to revenue. Analysts led by Samik Chatterjee noted 850 megawatts of AI compute were delivered in the quarter, three times the entire fourth quarter. They also highlighted $30 billion plus in new AI contracts and steady operating margins due to cost discipline.

"We got both better in-period execution and future-period bookings than anticipated. Check and check," added analysts led by Jackson Ader at KeyBanc Capital Markets. That 850 megawatts of data coming online pushes back at fears data-center project delays could impact near-term revenue recognition, they said.

-Barbara Kollmeyer

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