Oracle has a rosy outlook ahead, according to BMO Capital Markets. The bank upgraded the cloud computing stock to an outperform rating from market perform. Analyst Keith Bachman accompanied the move by lifting his price target to $235 from $200. Bachman’s revised price target implies an upside of nearly 18% ahead. Shares of Oracle have surged 20% this year. They added 13% on Thursday, a day after the company reported fiscal fourth-quarter results that exceeded analysts’ expectations on both the top and bottom lines. The stock fell 1% in premarket trading Friday. ORCL YTD mountain ORCL YTD chart Bachman attributed the ratings upgrade to “solid results and compelling guidance.” He also pointed out that Oracle’s remaining performance obligation, or RPO, of $138 billion was above consensus estimates of $132 billion, with a growth rate of more than 100% year over year. RPO is a forward-looking metric that measures the total value of services and products that have yet to be delivered to customers. “Hence, we think ORCL demand is durable over the next few years with some upside from very large partnerships, Bachman wrote. “If Oracle is close to generating 100% RPO growth during FY26 and meeting revenue targets, we think shares will move higher, all else equal.” Oracle also believes its year-over-year cloud growth could top 40%, and that its fiscal 2026 total revenues will also exceed Wall Street expectations. This upside in revenue guidance, Bachman added, contributed to “increased confidence in operating income growth.” The analyst pointed to an acceleration in database services and subscription revenue as another catalyst for oracle. “Recent channel feedback suggested that ORCL cloud database was improving, and ORCL database results modestly improved this quarter,” he said. “We believe that software growth, including database, can improve, which will help mitigate margin/mix impact over time.”
