Oracle Stock Could See 29% Upside According to Bank of America

Core Viewpoint - Oracle's stock is projected to have a 29% upside potential according to Bank of America, driven by strong cloud infrastructure revenue growth and a significant backlog of contracted future revenue [1][4]. Financial Performance - Oracle reported cloud infrastructure revenue growth of 84% year-over-year, reaching $4.89 billion in Q3 FY2026 [1][5]. - The company's remaining performance obligations (RPO) amounted to $553 billion, reflecting a 325% year-over-year increase, indicating strong visibility into future revenue [1][5]. Analyst Insights - Bank of America analyst Tal Liani has upgraded Oracle's stock to a Buy rating with a price target of $200, which is below the consensus target of $249.02 but focuses on near-term AI infrastructure demand [4][3]. - The stock is currently trading around $147.94, down 24.20% year-to-date and approximately 55% below its 52-week high of $345.72 [3]. Growth Drivers - Oracle's growth is heavily reliant on converting its substantial RPO backlog into recognized revenue while managing a $50 billion capital expenditure program and addressing negative free cash flow of -$24.7 billion [2][7]. - The company must sustain cloud revenue growth in the range of 46%–50% for Q4 FY2026 to support its price target [7]. Market Positioning - Oracle's multicloud positioning is strong, with its databases integrated across major platforms like Amazon, Google, and Microsoft, leading to a 531% year-over-year increase in multicloud database revenue [12]. - The company aims for a five-year OCI roadmap that projects annual revenue of $144 billion by FY2030, supported by its locked-in revenue backlog [12].