Oracle Corporation

New York Stock Exchange
Back to all articles
Bullish +65

Oracle Rallies 5% as Morgan Stanley Lifts Its Price Target, CoreWeave Advances 3%

AI-generated analysis

📈 Oracle stock rallied 5% to $167.15 following a Morgan Stanley price target raise that validated the AI infrastructure spending case.

☁️ Cloud Infrastructure revenue grew 93% year-over-year to $5.79 billion in Q4 FY2026, driven by strong GPU adoption.

📊 Remaining Performance Obligations surged 363% to $638 billion, with $75 billion specifically tied to prepaid or customer-supplied GPU AI contracts.

🎯 Management confirmed a $90 billion FY2027 revenue target and raised non-GAAP EPS guidance to $8.05.

💰 Oracle plans to raise approximately $40 billion through debt and equity in FY2027 to fund its aggressive expansion.

⚖️ Free cash flow was negative $23.7 billion for FY2026 due to $55.7 billion in capital expenditures on AI infrastructure.

📉 Oracle shares are down 14% year-to-date, making today's rally a recovery move off a weak annual performance.

🔍 The Morgan Stanley re-rating indicates sell-side analysts are now willing to underwrite the company's heavy capital plan.

🗓️ The next key catalyst is Oracle's Q1 FY2027 earnings release scheduled for September 2, which will test RPO trajectory.

Bullish Signals
  • Morgan Stanley raised its price target, validating the market's AI infrastructure spending case and lifting sentiment around Oracle's cloud pipeline.
  • Cloud Infrastructure revenue surged 93% year-over-year to $5.79 billion in Q4 FY2026, demonstrating strong demand for GPU AI contracts.
  • Remaining Performance Obligations jumped 363% to $638 billion, including $75 billion tied to prepaid or customer-supplied GPU AI contracts.
  • Management confirmed a robust $90 billion FY2027 revenue target and raised non-GAAP EPS guidance to $8.05.
  • The sell-side re-rating signals analyst confidence that Oracle can execute its capital plan against expected AI cloud revenue growth.
Risk Factors
  • Free cash flow was negative $23.7 billion for FY2026, driven by heavy $55.7 billion in capital expenditures.
  • Oracle plans to raise approximately $40 billion through debt and equity in FY2027, which remains a bear case concern for shareholders.
  • Shares are down 14% year-to-date, indicating the stock has underperformed despite recent positive catalysts.
  • The next earnings report on September 2 is a critical test; any deceleration in RPO trends could challenge the multiple Morgan Stanley is now willing to pay.
Full Analysis
Oracle stock surged 5% to $167.15 in early trading after Morgan Stanley raised its price target, validating the market's thesis on AI infrastructure spending. This rally occurred despite the broader market slipping and Oracle remaining down 14% year-to-date, signaling a potential recovery move following a rough stretch where shares fell well off their 52-week high of $341.82. The positive sentiment is anchored by constructive recent earnings data from Oracle's Q4 FY2026 report released on June 10. Cloud Infrastructure revenue jumped 93% year-over-year to $5.79 billion, while Remaining Performance Obligations (RPO) surged 363% to $638 billion, including $75 billion tied to prepaid or customer-supplied GPU AI contracts. Management has set an ambitious FY2027 revenue target of $90 billion and raised non-GAAP EPS guidance to $8.05. However, the capital plan remains a focal point for investors, with Oracle planning to raise approximately $40 billion through debt and equity in FY2027 against negative free cash flow of $23.7 billion for FY2026 driven by $55.7 billion in capex. Analysts view the Morgan Stanley re-rating as a signal that the sell-side is now willing to underwrite this aggressive capital plan against expected AI cloud revenue growth. The next critical confirmation point will be Oracle's scheduled Q1 FY2027 earnings release on September 2, where reported cloud growth and RPO trends will determine if today's move extends or unwinds.