Cloud computing super giant Oracle Corporation (ORCL.US) sparked a rise, Jefferies Financial Group Inc. has raised its target price to $270.

The Wall Street financial giant Jefferies Financial Group Inc. has significantly raised the target price of Oracle Corporation (ORCL.US) from $220 to $270 and maintained a "buy" rating, citing accelerating performance growth due to "large cloud computing deals." As of Tuesday's closing, Oracle Corporation's stock price rose nearly 1% to $234.50, reaching a historical high of $241.439 during the trading session, with the stock price increasing over 40% since announcing strong performance outlook in June. Led by Brent Thill, the team of analysts at Jefferies Financial Group Inc. pointed out that recent large cloud computing deals by Oracle Corporation, including a contract that is expected to generate over $30 billion in sales annually starting from the 2028 fiscal year, signify a key step in the company's transformation towards ultra-large-scale cloud providers, with market share expected to become closer to the two super cloud giants Amazon.com, Inc. AWS and Microsoft Corporation Azure. The Jefferies Financial Group Inc. analyst team stated that the scale of these large deals implies significant upside potential for consensus expectations for Oracle Corporation's cloud computing infrastructure as a service (IaaS) revenue and total sales to reach $46 billion and $93 billion, respectively, in the 2028 fiscal year, while significantly reducing the risk of achieving the company's target of $104 billion in total sales in the 2029 fiscal year. The analysts added that Oracle Corporation still stands out among the cloud computing leaders, with no other large software company or cloud computing company focusing on IaaS and SaaS able to achieve over 100% growth in remaining performance obligations (RPO) and sales continue to accelerate. A $30 billion mega deal! The team of analysts at Jefferies Financial Group Inc. stated that last week Oracle Corporation announced a series of landmark cloud computing service agreements, with the most notable contract expected to generate over $30 billion in sales annually from the 2028 fiscal year onwards. Although the identities of the customers have not been disclosed, the analysts at Jefferies Financial Group Inc. speculate that Oracle Corporation's deepening relationships with OpenAI, Softbank, and ARM may be related to the Stargate project. In another announcement, Oracle Corporation revealed that it will lease up to 4.5 gigawatts of super data center capacity to OpenAI, highlighting its key role in expanding AI infrastructure. The analysts at Jefferies Financial Group Inc. believe that these developments mark a significant turning point in Oracle Corporation's cloud computing strategy, which is expected to reshape investors' core discussions about the sustainability of backlog growth, the timing of sales super inflection points, and the company's ability to monetize AI demand on a large scale. The analysts pointed out that these large cloud computing deals enhance their confidence in Oracle Corporation achieving over 100% RPO growth rate in the 2026 fiscal year. Brent Hill and his team at Jefferies Financial Group Inc. stated that the current Wall Street consensus model expects Oracle Corporation's IaaS revenue to reach around $46 billion and total revenue to reach around $93 billion in the 2028 fiscal year, with a single large cloud computing deal potentially accounting for over 65% of the predicted IaaS revenue and nearly one-third of the total revenue for that year. "While full realization may take several years, the visibility and scale of these commitments significantly reduce the risk of Oracle Corporation achieving its $104 billion sales target in the 2029 fiscal year and increase the likelihood of a significant upward revision to the long-term financial framework at the upcoming 'CloudWorld Analyst Day,'" the team at Jefferies Financial Group Inc. stated. AI computing power demand continues to explode! Oracle Corporation, a veteran tech giant, emerges as one of the "big winners" in the AI boom Dan Morgan, a senior portfolio manager at Synovus Trust, recently stated that the market's focus has shifted to Oracle Corporation's strategic execution following a market value growth of up to $116 billion in just one week after reporting earnings. Its potential for development in the AI field reminds him of Microsoft Corporation's strategic turnaround in cloud computing ten years ago, and even the explosive growth in NVIDIA Corporation's data center business in 2023. "The expectations may be overly optimistic, but Oracle Corporation is in its 'adolescence' and has not yet reached its ceiling," Morgan said. "Perhaps in the future, when we look back on this quarter, we will realize that this is a turning point - we realize that there is still such a large room for growth." Well-known globally for its cloud computing services and database software, the tech giant Oracle Corporation can be considered one of the biggest winners in the global AI boom, riding the wave of AI, Oracle Corporation saw a 60% increase in its stock price in 2024, with a 45% increase so far this year and setting repeated historical highs, currently hovering near its all-time high. With global tech companies intensifying their efforts to develop AI software products such as ChatGPT, Oracle Corporation is one of the biggest beneficiaries of this trend, as its global customer base for cloud computing infrastructure (IaaS) and SaaS cloud computing application software is becoming increasingly large. The financial results for the fiscal year of 2025, ending on May 31, showed that Oracle Corporation's "remaining performance obligations" (RPO) - a key indicator of technology companies' demand and booking volume - reached $138 billion, higher than the previous quarter's $130 billion. The significant growth in RPO largely indicates Oracle Corporation's successful acquisition of large long-term customer subscription commitments in the field of cloud computing business. In the fourth quarter, Oracle Corporation's overall cloud computing business (including IaaS and SaaS) sales grew by 27% year-on-year to $6.7 billion, in line with analysts' expectations; with IaaS sales in the cloud infrastructure business sector growing by 52% year-on-year to $3 billion. More importantly, CEO Catz stated during the earnings conference call that IaaS sales in the 2026 fiscal year are expected to grow by over 70%, compared to a 52% increase in the current quarter. She also predicted that the company's sales for the 2026 fiscal year will exceed $67 billion, higher than the analyst's average expectation of about $65.18 billion. This positive outlook for the IaaS market has greatly boosted investors' optimism about Oracle Corporation's highly anticipated cloud computing business, leading investors to believe more firmly that under the drive of AI, Oracle Corporation's market share in the cloud computing field will eventually rival Amazon.com, Inc. AWS and Microsoft Corporation Azure. Wall Street analysts have been continuously raising their performance and stock price outlook for this 48-year-old tech company, mainly based on the huge growth potential of its cloud computing services as customers increasingly turn to deploying AI application software products. The high growth prospects, especially for the next fiscal year in the cloud infrastructure business, directly reflect the thirst for AI training/inference for AI computing resources, and demonstrate that Oracle Corporation's Oracle Cloud Infrastructure business (Oracle Corporation OCI) is aggressively capturing the core AI infrastructure previously dominated by cloud computing leaders such as AWS, Azure, and Alphabet Inc. Class C cloud platform GCP. In terms of AI infrastructure construction, the "Stargate" project, with a scale of up to $500 billion, and other super AI infrastructure projects require the participation of cloud giants including Microsoft Corporation, Oracle Corporation, and Amazon.com, Inc. AWS. From a global perspective, the global AI infrastructure wave that will soon be led by various governments around the world cannot be accomplished without the participation of cloud computing giants such as Alibaba Group Holding Limited Sponsored ADR and Tencent, as well as SAP, OVHcloud, etc., with a considerable proportion of the global funds invested in the AI infrastructure field expected to be allocated to the construction of AI infrastructure that combines high-performance AI computing hardware such as "integrated AI GPU and AI ASIC IaaS+PaaS+SaaS" as the core AI infrastructure. The "Stargate" project, a project of such a large-scale AI infrastructure, aims to create super large-scale data centers capable of supporting massive AI computing power needs, and constructing data centers of this caliber requires strong cloud computing infrastructure and storage resources to accommodate high-performance AI computing hardware. As a global leading cloud computing service provider, Oracle Corporation is able to provide the necessary massive core AI infrastructure and cloud computing application software services support, and has rich experience in data center construction and operation, thereby driving the strong growth trend in its demand for cloud computing services.