Shares of Oracle (NYSE: ORCL) rose Monday as the tech giant continued to win acclaim from Wall Street analysts, a week after the company posted a strong fiscal first-quarter earnings report as the company’s cloud infrastructure business continues to surge in the artificial intelligence (AI) era.
As of 1:14 p.m. ET Monday, the stock had jumped 6.3% on the news.
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Oracle still seems overlooked
In the aftermath of gains following last week’s earnings report, the stock continued to move higher as Melius Research upgraded the stock from hold to buy.
Melius credited Oracle’s accelerating revenue growth, and stable and solid margins, and it thinks the company can continue to top analyst estimates. The research firm raised its price target from $155 to $210, implying a 22% upside in the stock.
Additionally, over the weekend, Jefferies raised its price target on the stock from $170 to $190 and reiterated its buy rating on the stock.
Analyst Brent Thill said after attending a recent investor conference and talking to Oracle partners that the company is “getting its mojo back.” It also noted that growth in both Oracle Cloud Infrastructure and backlog is accelerating.
Can Oracle stock keep climbing?
With its strength in database management and a cloud infrastructure business known for security, Oracle seems like the kind of business that should thrive in the AI era, and indeed, it’s opening data centers faster than it ever has before.
In the first quarter, ended Aug. 31, the infrastructure business jumped 45% to $2.2 billion, and overall revenue was up 7% to $13.3 billion.
Remaining performance obligations jumped 53% in the quarter to $99 billion, showing demand is surging, and adjusted earnings per share was up 8% to $1.39, meaning margins are expanding.
The company remains optimistic about the future of AI and its cloud infrastructure business. Given that momentum, the stock looks like a good bet to keep gaining.
