Oracle (ORCL) is expected to post strong cloud growth and a boost in remaining performance obligations from large artificial intelligence contracts in its fiscal Q1 2026 results, but the company's stock reaction is expected to hinge on a few key questions surrounding its major artificial intelligence initiatives, RBC Capital Markets said.

Investors are closely watching three main areas, the growth of Oracle Cloud Infrastructure, the financial details of a major contract with Microsoft-backed (MSFT) OpenAI, and the status of the "Stargate" project, the brokerage said in a note Monday.

The firm added that investors are particularly focused on whether OCI can exceed the low-50% year-over-year growth mark and if the company's remaining performance obligations show a significant increase from large AI contracts.

While Oracle has confirmed a $30 billion deal with a client widely presumed to be OpenAI, the deal's specific financial contribution remains a key unknown. Analysts want to know how much of the revenue represents new business rather than a reallocation of existing workloads from Microsoft, the report said.

Stargate, which management previously said was not included in near-term guidance, is expected to play a key role in driving Oracle's long-term revenue target above $125 billion by fiscal 2029. Investors will look for progress signals in RPO and OCI commentary, according to the note.

For fiscal Q1, RBC estimates revenue of $14.98 billion and adjusted EPS of $1.48, compared with prior estimates of $14.81 billion and $1.45, and consensus of $14.95 billion and $1.48.

RBC maintained a sector perform rating on Oracle with a price target of $195.

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