Core Insights - Oracle achieved a significant milestone in Q1 of fiscal 2026, with Remaining Performance Obligations (RPO) increasing by 359% year over year to $455 billion, indicating a substantial backlog in the tech sector [1][9] - The growth is primarily driven by the rapid adoption of Oracle's cloud and AI services, securing four multibillion-dollar contracts from major companies such as OpenAI, Meta, NVIDIA, and AMD [2][9] - Oracle anticipates its Cloud Infrastructure (OCI) revenues to rise by 77% year over year to $18 billion in fiscal 2026, with ambitious revenue targets set for the next four years [3][9] RPO and Revenue Growth - The Cloud RPO surged nearly 500% after an 83% growth last year, with 33% of total RPO expected to convert into revenue within the next 12 months, enhancing confidence in Oracle's near-term performance [2] - Oracle's long-term revenue projections include $32 billion, $73 billion, $114 billion, and $144 billion over the next four years, much of which is already reflected in its backlog [3] Competitive Landscape - Microsoft remains a strong competitor with a commercial RPO of $368 billion, growing 35% year over year, and Azure revenues of $75 billion in fiscal 2025 [5] - Amazon's AWS holds $195 billion in outstanding deposits, with 25% growth and 17.5% revenue expansion year over year, maintaining its position as a mature cloud provider [6] - Despite Oracle's rapid RPO growth, Microsoft leads in revenue, while Oracle's aggressive multi-cloud and AI strategies are narrowing the gap [6] Stock Performance and Valuation - Oracle's shares have increased by 97% year to date, outperforming the Zacks Computer and Technology sector's return of 16.8% and the Zacks Computer - Software industry's rise of 15.4% [7] - The forward 12-month Price/Earnings ratio for Oracle is 34.55x, higher than the industry average of 32.26x, indicating a potentially overvalued position [10] - The Zacks Consensus Estimate for Oracle's fiscal 2026 revenues is $66.60 billion, reflecting a 16.02% year-over-year growth, with earnings projected at $6.73 per share, suggesting an 11.61% increase from fiscal 2025 [13]

Core Viewpoint - Okta, Inc. reported strong financial results for Q1 of fiscal 2026, exceeding Wall Street expectations in earnings and revenue, but the guidance provided led to a significant stock decline of 13% in after-hours trading [1][2]. Financial Performance - For Q1, Okta achieved earnings of $0.86 per share on revenue of $688 million, surpassing analyst estimates of $0.77 per share and $680 million in sales [2][3]. - The company's revenue grew by 12% year-over-year, primarily driven by increasing subscription services [3][4]. - Remaining Performance Obligations (RPO) increased by 21% year-over-year to $4.1 billion, indicating strong future revenue potential [3]. Operational Efficiency - Okta improved its adjusted operating margin by 500 basis points to 27% in Q1, reflecting enhanced operational efficiency [4]. - The combination of revenue growth and margin expansion resulted in a 32% increase in earnings per share [4]. Future Outlook - For fiscal 2026, Okta projects earnings between $3.23 and $3.28 per share on approximately $2.85 billion in sales, considering potential risks from the uncertain economic environment [5]. - The stock is currently valued at about 8 times its trailing revenues, slightly above its three-year average price-to-sales ratio of around 7x, suggesting room for growth despite the recent pullback [6]. Valuation and Market Position - The recent 13% decline in stock price post-Q1 announcement is viewed as overdone, with strong performance indicators justifying a potential upward revision of its valuation multiple [6]. - Okta's underlying business fundamentals show resilience and strategic momentum in the competitive cloud-based identity management market [7].