Jefferies Raises Oracle's Price Target to $270 Amid Accelerated Growth from "Mega Deals"

Jefferies raised Oracle's (NYSE:ORCL) price target to $270 from $220 and maintained its Buy rating, citing "mega deals" accelerating growth. Oracle shares rose about 2% premarket on Tuesday.

Jefferies has raised its target price for Oracle Corporation (NYSE: ORCL) shares to $270 from $220, while maintaining its 'Buy' rating. The brokerage firm cited recent "mega deals" as the primary driver behind this upward revision, indicating significant upside potential for Oracle's Infrastructure as a Service (IaaS) and total revenue projections.

Oracle's recent transactions, including a landmark contract expected to generate over $30 billion in annual revenue starting in fiscal 2028, represent a pivotal moment in its evolution as a hyperscaler. The scale of these agreements suggests meaningful upside to the fiscal year 2028 IaaS and total revenue consensus estimates, which are now projected at $46 billion and $93 billion, respectively. These deals also de-risk the $104 billion revenue target for fiscal 2029, according to Jefferies [1].

Analysts led by Brent Thill at Jefferies highlighted that Oracle remains a standout among large-cap software companies, with no other name tracking to over 100% Remaining Performance Obligation (RPO) growth and accelerating revenue growth. The analysts added that these transformative cloud services agreements, including a major deal with an undisclosed customer, mark a significant inflection point in Oracle's cloud strategy. These developments bolster confidence in Oracle's over 100% RPO growth guide for fiscal 2026 and potentially reshape key investor debates around revenue inflection and AI demand monetization [2].

The analysts noted that while the full ramp is still several years out, the visibility and magnitude of these commitments significantly de-risk Oracle’s fiscal 2029 revenue target of $104 billion. These deals also raise the likelihood of upward revisions to its long-term financial framework at its upcoming CloudWorld analyst day.

Oracle shares rose about 2% premarket on Tuesday following the news, reflecting investors' optimism about the company's growth prospects and the broker's positive outlook.

References:
[1] https://www.marketscreener.com/quote/stock/ORACLE-CORPORATION-13620698/news/Oracle-Jefferies-raises-target-price-50457318/
[2] https://seekingalpha.com/news/4465842-oracle-sees-price-target-raised-at-jefferies-amid-mega-deals-accelerating-growth