Since the beginning of the year, Oracle stock has gained 74%. Pivoting to become the artificial intelligence infrastructure build-out leader paid off.
On October 16, G42 revealed significant progress on the construction of Stargate United Arab Emirates (UAE), a 1GW large-scale AI infrastructure cluster being developed by Khazna Data Centers, a G42 company, within the 5GW UAE–U.S. AI Campus in Abu Dhabi.
The project is being built in partnership with OpenAI, Nvidia, Cisco, SoftBank, and Oracle, of course. G42 and its partners are focused on building the first 200MW of the 1GW mega-scale infrastructure on an accelerated timeline, and construction is now well underway and progressing steadily toward the planned 2026 delivery.
On the same day, IBM announced the availability of three new AI agents on the Oracle Fusion Applications AI Agent Marketplace.
Three new agents from IBM Consulting built with Oracle AI Agent Studio:
- Intercompany Agent: Automates the review of intercompany agreements
- Smart Sales Order Entry Agent: Helps streamline the sales-order creation process
- Requisition to Contract Agent: Converts a purchase requisition to a contract purchase order
“As AI agents rapidly transform enterprise applications, organizations are seeking new ways to drive productivity, agility, and innovation at scale,” said Kaushal Kurapati, GVP of product management for Fusion AI, Oracle.
Oracle Q1 revenue grows 12% to $14.9 billion year over year
On September 9, Oracle ORCL reported its results for Q1 of fiscal 2026.
“MultiCloud database revenue from Amazon, Google, and Microsoft grew at the incredible rate of 1,529 % in Q1. This revolutionary new cloud service enables the tens of thousands of our database customers to instantly unlock the value in their data by making it easily accessible to the most advanced AI reasoning models,” said Oracle Chairman and CTO Larry Ellison.
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Oracle earnings highlights:
- Revenue $14.9 billion, up 12% in USD and up 11% in constant currency
- Net income $2.927 billion, slightly lower compared to $2.929 in Q1 2025
- Earnings per share (EPS) down 2% to $1.01 year over year
- EPS $0.01 lower than the consensus estimates
- Free cash flow decreased 152% YoY to negative $5.9 billion
Bank of America says Oracle has an impressive target for fiscal 2030 revenue
Bank of America analysts Brad Sills and Madeline Brooks updated their opinion on Oracle stock after attending Oracle’s analyst day.
They said that management outlined impressive targets for fiscal year 2030 revenue and EPS of $225 billion and $21. Sills said that these targets are well ahead of consensus. Revenue target is 15% above Wall Street estimates, while EPS target of $21 was $2 ahead of Wall Street estimates.
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Analysts believe that the margin associated with the EPS target appears achievable, given the gross margin of 30% to 40% for the AI infrastructure compute business.
According to analysts, Oracle management now expects Oracle Cloud Infrastructure (OCI) revenue to reach $166 billion by 2030, implying a 75% compound annual growth rate, with OCI expected to account for 74% of revenues versus 50% today.
Analysts noted risks to their price objective:
- Severe downturn in enterprise software spending
- Currency headwinds
- Issues with the integration of past acquisitions
- Database competition from IBM, Amazon, and Microsoft
- Apps competition from SAP, Microsoft and others
- Development of viable open source database and middleware alternatives
Sills reiterated a buy rating with a price target of $368, based on his estimate of the enterprise value-to-sales ratio for calendar year 2027 of 12.4x, or 0.5x adjusted for 25% growth, a premium to the large-cap software group trading at 8x or 0.6x for 16% growth.
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