TLDR
- Global Equities Research raised Oracle’s price target to $400 from $250, citing a shift from Agentic AI to Context Engineering
- Oracle reports Q1 FY26 earnings on September 9, with analysts expecting $1.48 per share and $15.04 billion in revenue
- Oracle stock has gained 66% over the past year, driven by cloud infrastructure and AI services growth
- August saw weak IT deal closures, but analysts expect activity to pick up after September 22
- Options traders anticipate a 9.70% move in either direction following the earnings report
Oracle Corporation is heading into its Q1 FY26 earnings report with renewed analyst confidence and a hefty price target increase from Global Equities Research. The firm boosted its target from $250 to $400 while maintaining an Overweight rating on the database giant.
The upgrade comes as Oracle prepares to announce results on September 9. Wall Street expects earnings of $1.48 per share on revenues of $15.04 billion, representing 6.5% and 13% year-over-year growth respectively.
Oracle’s stock performance has been impressive, climbing 66% over the past year. The gains stem largely from strength in cloud infrastructure and AI-driven services as enterprises embrace generative AI solutions.
Global Equities analyst Trip Chowdhry pointed to a major shift in the technology landscape driving his bullish outlook. Developers are moving away from pure “agentic AI” toward “context engineering,” a trend that plays directly into Oracle’s strengths.
Chowdhry called Oracle’s Context Engineering capabilities “the mother of all AI Catalysts.” This shift positions Oracle favorably as companies seek more sophisticated AI implementations that require robust data management and processing capabilities.
Mixed Near-Term Outlook
The analyst acknowledged that August presented challenges for Oracle’s deal closure activity. IT spending weakness affected the broader sector, and Oracle wasn’t immune to this industry-wide slowdown.
Chowdhry expects the subdued deal environment to persist until September 22. After that date, he predicts IT spending activity will accelerate through year-end as companies finalize budget allocations.
The weakness appears temporary in nature. Chowdhry views the current softness as a buying opportunity for long-term investors, given Oracle’s solid fundamental position.
Mizuho Securities also raised its price target, moving from $245 to $300 while maintaining a Buy rating. The firm highlighted Oracle Cloud Infrastructure (OCI) as a key growth driver, praising its fast and cost-effective GPU clusters.
Oracle’s Cloud and License unit generated $11.7 billion in the most recent quarter, up 14% year-over-year. The growth was powered by strong demand for OCI and core business applications.
Market Expectations and Trading Activity
Options traders are positioning for volatility around the earnings announcement. The expected move based on options pricing is 9.70% in either direction, suggesting traders anticipate a meaningful reaction to the results.
Oracle has a track record of beating earnings estimates, outperforming expectations in six of the past nine quarters. This history adds weight to analyst optimism heading into tomorrow’s report.
The company currently trades with a market capitalization of $647 billion and a price-to-earnings ratio of 50x. Revenue growth of 8.4% reflects Oracle’s steady expansion in cloud services.
Wall Street maintains a Moderate Buy consensus rating on Oracle stock. The rating is based on 24 Buy recommendations and 10 Hold ratings issued over the past three months.
The average analyst price target stands at $253.24, implying 8.78% upside from current levels. However, Global Equities’ new $400 target suggests considerably more upside potential if the Context Engineering thesis plays out as expected.
Oracle’s Q1 FY26 earnings report will provide crucial insight into whether the company can capitalize on the AI boom while navigating near-term IT spending headwinds.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
