By Elsa Ohlen

Oracle stock jumped early Thursday as the software company set "stunning" growth targets for next year, according to one analyst. But the question now, is whether it can meet them.

Last year it had failed to live up to its growth goals, wrote KeyBanc analyst Jackson Ader, noting that while the targets this year are kind of stunning they are "just targets". He questioned whether Oracle can actually hit them.

Shares rose 7.7% to $190.00 in premarket trading Thursday. Futures tracking the S&P 500 were down 0.6%.

Oracle posted a better than expected 11% jump in sales and targeted even higher growth ahead. The company also predicted a total cloud growth rate of 40% in fiscal 2026, up from 24% this year. Oracle sees cloud infrastructure growth north of 70% next year, up from 50% this year.

"FY25 [full year 2025] was a very good year -- but we believe FY26 [full year 2026] will be even better as our revenue growth rates will be dramatically higher," said Oracle CEO, Safra Catz.

Ader says that you don't have to believe Oracle's initial forecast in order for it to deliver upside to numbers in the interim. The company is adding a backlog of business at an "impressive rate," he said, indicating that it's well positioned to hit at least some of its ambitious targets. The analyst has an Overweight rating on the stock and hiked his price target to $225 from $200.

After the bell Wednesday, Oracle posted adjusted earnings of $1.70 a share on revenue of $15.9 billion for its 2025 fiscal fourth quarter, exceeding analysts expectations of earnings of $1.64 on revenue of $15.6 billion, according to FactSet.

Adler wasn't the only one getting more bullish following the latest earnings report. Jefferies analysts led by Brent Thill also upped their price target to $220 from $200 on the back of the report. The earnings beat reinforced the breadth of the AI buildout, they wrote in a note early Thursday, maintaining a Buy-rating on shares.

That optimistic sentiment is shared with 63% of the 41 analysts covering the stock with a Buy or Buy-equivalent rating, according FactSet. The average Buy-rating for S&P 500 companies is about 55%. None rate it Sell.

Coming into Thursday trading, Oracle shares were up 26% over the past 12 months, outperforming the blue chip index' 11% gain. The stock trades at a forward price to earnings ratio of 26.4.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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June 12, 2025 05:18 ET (09:18 GMT)

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