Key Takeaways:
Oracle Corp. reports fiscal first-quarter results Thursday with Wall Street projecting revenue of $19.13 billion, a 28 percent jump that would mark the fastest growth since at least 2017, according to Koyfin data. Adjusted profit is expected to rise 29 percent to $1.30 a share.
"Most bad news is priced in," Jefferies analysts wrote last week, cutting their price target to $290 from $320 while arguing the stock may be on the cusp of a buying opportunity. The new target still implies roughly 82 percent upside from Friday's $158.78 close.
The report lands as investors weigh whether Oracle's AI infrastructure buildout can generate revenue fast enough to justify the spending. Cloud infrastructure growth surged 93 percent in the prior quarter, and the company's contracted backlog rose 363 percent in fiscal 2026 to a record $638 billion. Morgan Stanley analysts said Oracle could report annualized cloud revenue growth of up to 63 percent in the latest quarter, driven by its GPU-as-a-service business.
The stakes are high because the buildout has strained the balance sheet. Oracle posted negative free cash flow of $23.7 billion in fiscal 2026, with capital expenditures tied to AI plans that include future data center leases totaling $260 billion. Debt climbed to $129.5 billion, and S&P Global in July downgraded the company's credit rating to one notch above junk status.
Shares climbed 5.7 percent Thursday after Oracle expanded an AI infrastructure partnership with Hewlett Packard Enterprise, agreeing to deploy HPE Juniper Networking equipment across its global AI data centers. The stock has gained 15 percent over the past month but remains down 20.2 percent year to date.
The expanded deal, announced alongside HPE's quarterly report, builds on more than a decade of engineering collaboration between Oracle and Juniper Networks, which HPE acquired in 2024. HPE issued Oracle warrants to purchase its common stock as part of the agreement. HPE reported fiscal third-quarter revenue of $12.21 billion, up 34 percent year over year, while adjusted earnings per share climbed more than 30 percent to $1.11.
Retail sentiment on Stocktwits turned bullish ahead of the report, with traders calling the stock undervalued after its year-to-date decline. "ORCL way undervalued and beaten down. Holding long and strong through ER," one trader wrote.
The earnings release will offer a fresh data point on whether the AI infrastructure spending boom across the sector is translating into durable revenue. Investors will watch how quickly the $638 billion backlog converts to revenue and whether cloud infrastructure can sustain its near-doubling pace as new capacity comes online. Oracle's results, due after the market close Thursday, could move the stock sharply and ripple across AI-infrastructure peers including Microsoft, Amazon and Google.
This article is for informational purposes only and does not constitute investment advice.
