Oracle Corp (NYSE:ORCL) is scheduled to report its fourth quarter results for fiscal 2026 on Wednesday, June 10.
The results are likely to show Cloud growth inflection, with incremental data center capacity coming online, according to BofA Securities.
The Oracle Analyst: Analyst Tal Liani maintained a Buy rating, while raising the price target from $200 to $240.
The Oracle Thesis: New data center capacity becoming available is likely to have enabled more revenue recognition from the company's RPOs (remaining performance obligations), Liani said in the note.
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He expects Oracle's Cloud PaaS/IaaS to grow 94% year-on-year in the fourth quarter of fiscal 2026, accelerating from 84% in the previous quarter.
"We see Cloud margins and new compute deal announcements as increasingly important areas of focus as the Cloud segment becomes a larger portion of revenue," the analyst wrote. He further stated that the Cloud segment currently represents 52% of Oracle's total revenues, up from 44% a year ago.
Margins: Liani expects Cloud & Software gross margins to be 70%, almost flat versus the previous quarter, with total gross margin at 67%.
Capex In Focus: Oracle's capital expenditures are likely to be a focus area during the earnings call, as the company continues to "invest aggressively in data center capacity to meet its backlog commitments and overall demand for compute," the analyst wrote.
Stock Performance: Liani noted that the stock had risen more than 30% since Oracle reported its third-quarter earnings and over 45% since March, driven mainly by:
- Strength in the broader software market
- Reduced funding overhang following Oracle's recent debt and equity raises of around $50 billion
The price target had been raised to reflect robust underlying demand across cloud infrastructure and database workloads, he further said.
ORCL Price Action: Oracle shares were down 1.25% at $209.16 at the time of publication on Tuesday, according to Benzinga Pro data.
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