Oracle Increases Cloud Infrastructure Investment to $50 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Source: Newsfilter
Updated: 1 hour ago0mins
- Increased Capital Expenditure: Oracle plans to ramp up capital expenditures from $35 billion to $50 billion in the current fiscal year to meet strong demand from clients like Meta and Nvidia, demonstrating the company's commitment to cloud infrastructure and confidence in market prospects.
- Surge in Lease Commitments: As of November 30, Oracle's lease commitments reached $248 billion, a 148% increase since August, indicating the company's long-term investment intentions in data centers and cloud capacity, which is expected to enhance its competitiveness in the AI market.
- Strong Customer Demand: OpenAI has become a major cloud customer for Oracle, committing over $300 billion in contracts, reflecting the urgent demand for cloud computing capabilities in the AI sector while also presenting significant revenue potential for Oracle.
- Increased Debt Burden: Despite strong demand for AI infrastructure, Oracle reported weaker-than-expected revenue in its latest earnings release, leading to an almost 11% drop in stock price, raising concerns among analysts about how the company will finance its data center expansions and indicating market skepticism about its financial health.
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ORCL is 352.52 USD with a low forecast of 175.00 USD and a high forecast of 415.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
37 Analyst Rating
25 Buy
11 Hold
1 Sell
Moderate Buy
Current: 223.010
Low
175.00
Averages
352.52
High
415.00
Current: 223.010
Low
175.00
Averages
352.52
High
415.00
KeyBanc
Overweight
downgrade
$350 -> $300
2025-12-11
New
Reason
KeyBanc
Price Target
$350 -> $300
2025-12-11
New
downgrade
Overweight
Reason
KeyBanc lowered the firm's price target on Oracle to $300 from $350 and keeps an Overweight rating on the shares after another quarter where the future sounds bright but current results were disappointing. The cloud portion of revenue and gross margin missed estimates while IaaS grew 68% to $4.1B vs. $4.2B estimates entering the print. Total remaining performance obligation surpassed $500B but was in line with KeyBanc's $523B expectation and slightly below the Street's $526.2B forecast. It's a substantial number, but as the share reaction shows, investors are ready for execution right now, the firm adds.
Piper Sandler
Overweight
downgrade
$380 -> $290
2025-12-11
New
Reason
Piper Sandler
Price Target
$380 -> $290
2025-12-11
New
downgrade
Overweight
Reason
Piper Sandler lowered the firm's price target on Oracle to $290 from $380 on lower estimates and multiple factoring in increased execution risk, while keeping an Overweight rating on the shares. The firm notes investor scrutiny on Oracle has intensified in the months following the positive 35% 1-day move in reaction to Q2 results, with concerns surfacing around customer concentration, gross margin profile for AI deals, funding, and monetization of the capacity build-out. Shares sold off about 12% after hours as FY26 capex expectations were raised by $15B. While the aforementioned concerns will likely remain top-of-mind near-term, Oracle remains well positioned as a secular winner in AI infrastructure, Piper argues.
Citi
Tyler Radke
Buy
downgrade
$375 -> $370
2025-12-11
New
Reason
Citi
Tyler Radke
Price Target
$375 -> $370
2025-12-11
New
downgrade
Buy
Reason
Citi analyst Tyler Radke lowered the firm's price target on Oracle to $370 from $375 and keeps a Buy rating on the shares. The firm says the company's fiscal Q2 report missed expectations with "mixed" near-term trends. However, Oracle is not facing a demand issue as its growth continues to pick up, the analyst tells investors in a research note.
Bernstein
Outperform
to
NULL
downgrade
$364 -> $339
2025-12-11
New
Reason
Bernstein
Price Target
$364 -> $339
2025-12-11
New
downgrade
Outperform
to
NULL
Reason
Bernstein lowered the firm's price target on Oracle to $339 from $364 and keeps an Outperform rating on the shares. The firm notes Oracle announced their Q2 results in what could best be described as a complex quarter and earnings call, as the new management team tried to answer the key investor questions. But investors are looking for numbers to "hang their hat on" and since the closest answer was the statement that cash required will be less than $100B and likely meaningfully less, the controversy is going to continue, Bernstein adds.
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About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
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Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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