Piper Sandler Defends Oracle's Cloud Revenue Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Yahoo Finance
- Cloud Infrastructure Revenue Potential: Piper Sandler's analysis suggests Oracle could generate approximately $2.2 billion in Oracle Cloud Infrastructure (OCI) revenue, exceeding consensus estimates, based on capital expenditure to data center capacity conversion, indicating strong growth potential in the cloud market.
- Financial Performance Outlook: Analyst Billy Fitzsimmons noted that despite challenges around capital requirements, AI monetization, and customer concentration, the accelerating growth of OCI and the new CFO's prudent guidance are expected to positively impact the apps business in FY27, enhancing market confidence.
- Capacity Expansion Expectations: Piper Sandler estimates that Oracle could add approximately 2,400 megawatts of cloud computing capacity in fiscal 2027, based on a baseline cost of $46 million per megawatt and IaaS revenue of $13.5 million per megawatt, showcasing the company's expansion potential in cloud infrastructure.
- Growth Momentum Analysis: With projected OCI revenue reaching $41.1 billion in FY27, compared to the current estimate of $20.8 billion, Piper Sandler believes this represents a 12% tailwind for OCI growth, and despite Oracle shares pulling back after fourth-quarter results, the analysis suggests this presents a buying opportunity.
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Analyst Views on PIPR
Wall Street analysts forecast PIPR stock price to rise
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 72.940
Low
386.00
Averages
386.00
High
386.00
Current: 72.940
Low
386.00
Averages
386.00
High
386.00
About PIPR
Piper Sandler Companies is an investment bank and institutional securities firm, serving corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. The Company provides products and services, including financial advisory services; equity and debt capital markets products; public finance services; institutional brokerage services; fundamental equity and macro research services; fixed income services; and alternative asset management strategies. It offers equity and fixed income advisory and trade execution services for institutional investors, corporations, and government and non-profit entities. Its segment provides investment banking services, institutional sales and trading services for various equity and fixed income products, and research services. It operates alternative asset management funds in merchant banking and healthcare to invest firm capital and manage capital from outside investors.
About the author
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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- Financial Performance Outlook: Analyst Billy Fitzsimmons noted that despite challenges around capital requirements, AI monetization, and customer concentration, the accelerating growth of OCI and the new CFO's prudent guidance are expected to positively impact the apps business in FY27, enhancing market confidence.
- Capacity Expansion Expectations: Piper Sandler estimates that Oracle could add approximately 2,400 megawatts of cloud computing capacity in fiscal 2027, based on a baseline cost of $46 million per megawatt and IaaS revenue of $13.5 million per megawatt, showcasing the company's expansion potential in cloud infrastructure.
- Growth Momentum Analysis: With projected OCI revenue reaching $41.1 billion in FY27, compared to the current estimate of $20.8 billion, Piper Sandler believes this represents a 12% tailwind for OCI growth, and despite Oracle shares pulling back after fourth-quarter results, the analysis suggests this presents a buying opportunity.
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- Financial Performance Outlook: Analyst Billy Fitzsimmons noted that despite challenges around capital requirements, AI monetization, and customer concentration, the accelerating growth of OCI and the new CFO's prudent guidance are expected to positively impact the apps business in FY27, enhancing market confidence.
- Capacity Expansion Expectations: Piper Sandler estimates that Oracle could add approximately 2,400 megawatts of cloud computing capacity in fiscal 2027, based on a baseline cost of $46 million per megawatt and IaaS revenue of $13.5 million per megawatt, showcasing the company's expansion potential in cloud infrastructure.
- Growth Momentum Analysis: With projected OCI revenue reaching $41.1 billion in FY27, compared to the current estimate of $20.8 billion, Piper Sandler believes this represents a 12% tailwind for OCI growth, and despite Oracle shares pulling back after fourth-quarter results, the analysis suggests this presents a buying opportunity.
See More
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- New Managing Director: Piper Sandler Companies has appointed John D’Amico as a managing director in the restructuring group, expected to enhance the firm's capabilities in advising on complex restructurings and special situation transactions.
- Extensive Industry Experience: D’Amico brings approximately 25 years of investment banking and corporate advisory experience, having advised companies, boards, and creditor committees across various industries, showcasing his expertise in complex Chapter 11 and out-of-court restructurings.
- Strategic Addition: Prior to joining Piper Sandler, D’Amico was a senior member of the restructuring groups at Miller Buckfire and Jefferies, and his extensive background is anticipated to significantly support the growth of the firm's restructuring practice.
- Leadership Endorsement: Matthew Mintzer, managing director and global co-head of the restructuring group, emphasized that D’Amico's proven track record will provide invaluable support for clients navigating complex situations, further driving the firm's business development.
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- On Holding Brand Expansion: On Holding's sales increased by 26% year-over-year in Q1 2026, with gross margin rising from 59.9% to 64.2%, indicating robust performance in the premium activewear market, and brand penetration in the U.S. reached 30% for the first time.
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- User Engagement Surge: The platform saw a 26% year-over-year increase in unique active buyers and a 29% rise in fintech monthly active users, indicating significant room for growth in e-commerce and fintech penetration.
- On Holding Brand Development: On Holding achieved a 26% year-over-year sales increase in Q1 2026, with gross margins improving from 59.9% to 64.2%, showcasing the strong performance of its premium product line and brand loyalty.
- Attracting Young Consumers: On Holding recorded its largest-ever increase in the share of 18-to-24-year-olds in its direct-to-consumer customer base, indicating enhanced brand penetration in the youth market, further strengthening its competitive position.
See More
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- Nike Sales Recovery: Nike achieved flat sales in the third quarter of fiscal 2026, improving from a previous decline of 10%, although management still anticipates a full-year sales decline, indicating the company's potential to seek recovery amidst adversity.
- Lululemon Performance Fluctuations: Lululemon reported a 4% sales increase in the first quarter of fiscal 2026, but lowered its full-year guidance due to declining profitability and leadership changes, reflecting the challenges faced and a shake in market confidence.
- China Market Performance: Lululemon's sales in China increased by 30% year-over-year, while sales in the U.S. fell by 4%, indicating that its strong performance in international markets could be a key driver for future growth.
- Dividend Appeal: Nike's current dividend yield stands at 3.9%, and despite facing sales pressures, it has not suspended its payout, providing investors with stable cash flow and enhancing its attractiveness in the market.
See More
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- Nike's Brand Power: Nike boasts the highest brand strength among global apparel brands, maintaining its top position in youth market surveys despite recent sales declines and stock price drops, indicating strong recovery potential.
- Signs of Sales Recovery: In the third quarter of fiscal 2026, Nike reported flat year-over-year sales, an improvement from previous declines of 10%, with management identifying a recovery path despite expectations for continued annual sales declines.
- Lululemon's Market Challenges: Lululemon achieved a 4% sales increase in the first quarter of fiscal 2026, but has lowered its full-year guidance due to declining profitability and negative attention from a proxy fight involving its founder, reflecting a lack of market confidence.
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