Oracle (NYSE:ORCL) was in focus on Thursday as research firms Guggenheim and Jefferies upped their price target on the IT giant ahead of its fiscal second-quarter results, set to be released after the close of trading on December 9.
Shares rose 0.6% in premarket trading.
"We expect Oracle to at least meet F2Q25 expectations and guide F3Q25 in line," Guggenheim analyst John DiFucci wrote in a note to clients. "Our field checks indicated solid F2Q25 momentum in Oracle’s Cloud business as the company leverages its unique technology advantages across SaaS and IaaS, while pipelines for the second half of the FY are highly optimistic."
DiFucci continued: "ORCL’s AI strategy of embedding incremental services within its core platform is also becoming a meaningful differentiator and is accelerating the pace of on-premise application migrations to SaaS where customers can realize those benefits."
DiFucci, who reiterated his Buy rating and upped his price target to $220 from $200, added there has been more traction with Oracle Database via partnerships with hyperscalers, including several deals with Google (GOOG) (GOOGL) Cloud and another one coming with Amazon (AMZN) Web Services, according to a partner. This is notable, given there has not been much out of the Microsoft (MSFT) Azure partnership that went live about a year ago.
"Consensus revenue estimates generally imply reasonable New ARR growth, though IaaS requires New ARR to double, which was the case last quarter (and Oracle did better than that) but we have trust in management’s visibility," DiFucci added.
Jefferies analyst Brent Thill also upped his price target to $220 (from $190), as he noted recent checks suggest "modest pipeline improvement."
"[Fiscal second-quarter] expectations are elevated coming out of a bullish Sept analyst day and LT rev targets that imply a multi-year growth [acceleration]," Thill, who has a Buy rating on Oracle, wrote in a note to clients. "Continued backlog momentum & better backlog-to-[revenue] conversion are needed to keep the stock on its run."
A consensus of analysts expect Oracle to earn $1.48 per share on $14.12B in revenue.
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