ORCL Stock On Track To Erase Pre-Earnings Losses, Barclays Says Growth Has 'Inflected'

(MENAFN- AsiaNet News)

• Barclays maintained an 'Overweight' rating and said Oracle's growth has reached an inflection point that could lead to further acceleration.
• Meanwhile, Stifel took a more cautious view on Oracle's valuation, lowering the firm's price target to $200 from $220 while maintaining a 'Buy' rating on the shares.
• Oracle reported 30% fiscal first-quarter revenue growth to $19.35 billion, while adjusted earnings reached $1.92 per share.

Oracle (ORCL) shares jumped in early morning trade on Friday after the company reported fiscal first-quarter results and Barclays raised its price target, saying the cloud and software giant's growth has reached an inflection point and could accelerate from here.

Barclays raised its price target to $252 from $250 while maintaining an 'Overweight' rating on Oracle. The firm said investors may be ready to revisit the Oracle story after the earnings report, citing improving growth momentum and a stronger funding position.

“The company's growth inflected and should continue to accelerate from here,” Barclays said in a research note to investors cited by TheFly.

ORCL stock rose over 7% in pre-market trade, on track to wipe out the losses seen in the two-day slide ahead of its earnings. The shares were among the top trending tickers on Stocktwits at the time of writing, with platform data showing an over 600% jump in message volume over the past day.

ORCL stock price performance over the past two months and in pre-market trade on September 11 as of 6:15 a.m. ET | Source: TradingView

Barclays Sees Stronger Growth Ahead

Barclays noted Oracle's completion of its $20 billion at-the-market (ATM) equity offering. With the offering completed, Barclays sees less uncertainty around how Oracle will finance its expansion. 

The firm believes management did a good job addressing investor concerns over infrastructure delays and margins during the earnings report.

Stifel Remains Bullish Despite Lower Target

Stifel analyst Brad Reback took a more cautious view on Oracle's valuation, lowering the firm's price target to $200 from $220 while maintaining a 'Buy' rating on the shares.

Reback said it was“a strong quarter” and pointed to management's decision to raise fiscal 2027 revenue guidance to more than $90 billion. That outlook implies roughly 120% growth for Oracle Cloud Infrastructure, according to Stifel.

While the firm expects lower near-term gross margins, Reback forecast that the impact could be offset over time by accelerating OCI growth and greater operating expense efficiencies.

Oracle Posts 30% Revenue Growth

Oracle's first-quarter revenue increased 30% to $19.35 billion, exceeding Wall Street projections of $19.14 billion, as per Koyfin data. Adjusted earnings were $1.92 per share, higher than analysts' estimates of $1.74 per share.

The company also raised its fiscal 2027 adjusted earnings forecast to $8.10 ​per share from $8.05, and forecast annual revenue of at least $90 billion.

How Is Retail Feeling About ORCL Stock?

On Stocktwits, retail sentiment around Oracle shares rose to 'extremely bullish' from 'bullish' territory over the past day, with chatter rising to 'extremely high' from 'high' levels. 

ORCL stock retail sentiment on September 11 as of 6:20 a.m. ET | Source: Stocktwits

Some retail traders focused on the potential for further gains if upcoming inflation data supports a broader market rally.

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Others were divided on how the company's negative cashflow would impact the stock once markets opened. Oracle reported negative free cash flow of around $54 billion  driven by heavy AI infrastructure capital expenditure that exceeded operating cash generation.

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Oracle stock has fallen around 22% this year and more than 50% over the past 12 months before Friday's pre-market move, leaving the latest rally with significant ground to recover.

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