By Tae Kim

Oracle's cloud business is just getting started. There are many years of rapid growth ahead, according to Bernstein.

On Tuesday, analyst Mark Moerdler reiterated his Outperform rating and raised his price target for the stock to $308 from $269.

Shares were up 0.4% to $253.60 in midday trading. The stock is up 55% this year, compared with a 9% gain for the Nasdaq Composite.

"We expect Oracle's growth to accelerate for the next few years," he wrote. "Oracle is in the early days of a massive Cloud transition, with Oracle Cloud Infrastructure $(OCI.UK)$ on track to become the 4th largest global hyperscaler."

Oracle has proven to be the third-party cloud provider of choice for leading artificial-intelligence-model companies, and it is a strong partner of Nvidia, the leading maker of AI chips. Oracle executive Mahesh Thiagarajan told Barron's late last year that four of the five largest makers of AI large-language models use the company's data centers.

Moerdler predicts Oracle can achieve annual revenue growth in the "mid-teens" percent over next five to 10 years. The company's free cash flow will be curtailed in the next few years, but then rise materially over the long term, according to the analyst.

Also on Tuesday, BofA Global Research raised its price target to $295 from $220, but maintained its Neutral rating. The firm cited the rising demand for AI infrastructure.

In June, Oracle issued a regulatory filing that said CEO Safra Catz stated the current fiscal year is "off to a strong start" and that it had signed several large cloud agreements. One is "expected to contribute more than $30 billion in annual revenue starting in FY28," the filing said.

Write to Tae Kim at tae.kim@barrons.com

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August 05, 2025 12:36 ET (16:36 GMT)

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