Analysts were left confused on where Oracle shares could go from here after the database software giant delivered its fiscal second-quarter report . Shares of Oracle plummeted 11% after the company reported revenue of $16.06 billion, less than the $16.21 billion analysts polled by LSEG had expected. Software revenue in the quarter fell 3% and came in at $5.88 billion. This also missed the $6.06 consensus estimate. On top of that, the company’s free cash flow for the November quarter was negative by about $10 billion, while the StreetAccount consensus was negative $5.2 billion. Oracle’s mixed results threw analysts for a loop, with many pointing out that uncertainty and overhang could linger as investors wonder how Oracle will hit its ambitious forecasts. Morgan Stanley said its price target and other estimates were “under review.” Many other analysts cut their price targets, citing a potentially long overhang on the stock. “The stock saw a significant negative reaction after hours, which in our view signals investors may be increasingly losing confidence in Oracle’s ability to convert this large (and still expanding) backlog into durable, profitable, revenue streams,” wrote Morgan Stanley analyst Keith Weiss. “Bottom line, investors need greater confidence that the emerging GPUaaS business will be accretive to earnings and free cash flow, and that the counterparties underpinning Oracle’s robust backlog will prove durable, before underwriting out-year targets.” Bernstein’s Mark Moerdler echoed the sentiment that Oracle’s last quarter was overall a decent one, but was muddled by complex controversies. He said that investors would “need more details” before fully embracing Oracle’s long-term thesis, which he believes is ultimately positive. “Investors are looking for numbers to ‘hang their hat on’ and since the closest answer was the statement that cash required will be < $100B and likely meaningfully less, the controversy is going to continue. Combining this with a mixed quarter and increased CAPEX and the stock was down ~11% in the aftermarket,” he wrote. Bank of America added that Oracle’s stock move is representative that it is now paying the price to invest in AI infrastructure growth. “If you build it, they will come. But you have to build it first,” wrote analyst Brad Sills. Bottom line, most analysts maintained their long-term bullish stance on Oracle, citing the company’s longer-term artificial intelligence thesis, although they acknowledged that there could be some near-term friction ahead. Wells Fargo said that it expected a “bumpy ride” that would ultimately lead to a “worthwhile destination.” JPMorgan: neutral rating, $230 price target The bank’s target implies about 3% upside from Oracle’s Wednesday close. “Taken together, the quarter reinforces the bifurcated nature of the Oracle story: substantial, highly visible long-term growth embedded in RPO, balanced against a nearer-term P & L and FCF profile still constrained by license variability, the timing of large AI workloads coming online, and rapid capacity buildout.” Wells Fargo: overweight, $280 Wells Fargo’s forecast offers upside of 26%. “While NT questions around ROIC likely persist given scale & existing targets, we see the ORCL debate largely unchanged post print. Expect will be a bumpy ride, but we remain focused on the LT & see ORCL set for cont. reaccel & IaaS share gains … Our $280 PT is derived from 30x P/E on Fwd NTM ests, above historical levels but reasonable in our view given the magnitude of AI opp ahead and ORCL’s favorable positioning within key AI lab accounts.” Bank of America: buy, $300 Bank of America’s target, down from $368, corresponds to upside of around 35%. “Oracle is entering into the heaviest phase of its AI infrastructure buildout, and 3Q highlighted the timing mismatch of buildout spend to revenue conversion. OCI revenue growth of 69% y/y was only inline with Street, while capex of $12bn was $4bn ahead of consensus … We view the current mismatch of spend versus revenue as an investment curve issue rather than a change in fundamentals.” Barclays: overweight, $310 Barclays’ target, lowered from $330, calls for 39% upside going forward. “We see shares lower in the ST. 2Q26 was solid and showed ORCL’s acceleration story, but missed the mark in a few key areas. Mgmt importantly addressed key debates head on, and there were positives here. However, at the same time, ORCL also introduced new variables, which creates more questions.” Morgan Stanley: equal-weight, $320 Analyst Keith Weiss’ forecast is 43% above Oracle’s Wednesday closing price. “Cloud growth at the low-end of the guide with building pressure on gross margins and op margins may further sap investor confidence in ORCL’s ability to execute efficiently against a large and growing book of GPUaaS business, leaving the shares lacking a clear catalyst. PT & estimates under review.” UBS: buy, $325 Analyst Karl Keirstead’s price target, down from $380, represented upside of 46%. “Oracle posted 2Q/Nov results (13% c/c revs growth, 66% cloud infra growth) that fell slightly short of investor estimates, as did the messaging around leverage/financing, but in our view the conversion of the massive $523b deal backlog to high revs growth in 2H/ FY27 is compelling enough that we’re sticking with our Buy rating.” Bernstein: outperform, $339 The firm lowered its price target from $364. This updated forecast still implies the stock could rise 52% from here. “While the assurance and discussions were relevant and valuable they lacked quantification that many desired. While we sympathize with the complexity of detailing long term economics (even though management felt they were able to guide to revenue and EPS) during a massive new business build up in a fast evolving industry, investors are going to need more details. Fundamentally, we think this is a great story that will take longer for investors to wrap their minds around.” Citi: buy, $370 Citi’s target, lowered from $375, equates to 66% upside. “Near-term revision trends were mixed with a large EPS beat offset by revenue in-line and Q3 EPS guidance slightly below. At the same time, growth rates across revenue, RPO and cRPO are all accelerating. with FY26 CapEx raised by $15B(40%+), and a $4B raise to FY27 revenue. These metrics all offer encouraging forward-looking signals on where the business is going, and the health/broad-based demand for AI infrastructure, despite underwhelming near-term revisions … We continue to project ORCL revenue/EPS growing at 30/27% CAGR thru FY30, which is among the fastest in software/tech and the broader market.” Deutsche Bank: buy, $375 Analyst Brad Zelnick’s price target was approximately 68% higher than Oracle’s closing price on Wednesday. “As for the quarter itself and guidance, coming in at the lower end of the range and below consensus on Cloud doesn’t help the cause, but this is not atypical for Oracle, and we choose to instead focus on the broader trend of acceleration at scale (and backed by a jump in cRPO +40% y/y from 25% last quarter) which remains unique within megacap tech and certainly within Software. Lastly, we do believe at current levels, the stock is discounting little if not negative value for Oracle’s AI business where we believe The bear case looks… bullish.”
