Barclays resets Oracle stock price target

Aditya Raghunath

Sun, September 13, 2026 at 9:03 PM GMT+3 4 min read

ORCL -1.74%

Valued at a market cap of $465 billion, Oracle is among the world's largest companies. The cloud giant has returned 335% to shareholders over the past decade, in dividend-adjusted gains.

Despite these stellar returns, Oracle (ORCL) stock is down 54% from all-time highs, at the time of writing.

It recently announced fiscal first quarter results (ended in August), following which several investment firms reset their targets for Oracle's stock price.

As reported in The Fly, Barclays raised its price target to $252 from $250 and kept an "Overweight" rating on the tech stock. The stock price is currently around $154.

According to Barclays, investors are revisiting the Oracle story following the Q1 report. The investment bank believes the company's growth has inflected and should keep accelerating going forward.

Oracle stock gets a lift from record quarter

Oracle posted total revenue of $19.3 billion for the quarter, up 30% year over year. It was the first time Q1 revenue grew sequentially, something CFO Hilary Maxson called an important signal that the company is building scaled infrastructure the right way.

Cloud infrastructure revenue jumped 121% to $7.4 billion. Cloud apps grew 10%, with Fusion applications and industry apps growing even faster.

Non-GAAP operating income rose 31% to $8.2 billion, and non-GAAP earnings per share came in at $1.92, up 30%.

More AI:

One number stood out even more. Oracle's remaining performance obligations, a measure of contracted future revenue, grew by $26 billion during the quarter.

Here is why that matters for investors watching Oracle stock:

Most of that new backlog came through prepayments or customers bringing their own hardware.
Basically, Oracle does not need to spend additional cash to fund it.
The company now expects about half of its total backlog to convert into revenue over the next 36 months.
RPO conversion is already showing up in the infrastructure numbers, which grew 121% after a 93% jump in the prior quarter.

Oracle stock price target reflects better funding picture

Barclays pointed to Oracle's funding setup as a key reason for its confidence.

The company completed its previously announced $20 billion market equity issuance during the quarter, giving it additional room to keep investing without leaning entirely on debt.

Management also fielded tough questions about data center delays in New Mexico and Wisconsin, two sites that have drawn plenty of analyst attention.

Co-CEO Clay Magouyrk addressed those concerns directly on the earnings call, stating:

"Neither of these sites will have any impact into our previously stated FY 2027 revenue or earnings guidance."

He added that large data center projects come online in phases, so a delay at one site does not create a sudden hit in any single quarter.

Barclays believes Oracle handled both the delay questions and the margin questions well, which helped support the higher price target.

Oracle, co-CEO, Clay Magouyk, is bullish on AI demandBloomberg / Getty Images

Oracle's financial health is under watch

Oracle's growth story looks strong, but the balance sheet tells a more mixed picture. According to data complied from Fiscal.ai:

Total debt has climbed to $155.9 billion on a trailing twelve-month basis, up from $90.5 billion just two years ago. Net debt now sits at $118.9 billion.
Free cash flow was negative $28.7 billion over the trailing twelve months, driven by capital expenditures of $75.7 billion as Oracle rapidly builds out data centers.
The company spent $28 billion on CapEx this quarter alone, and Hilary Maxson said full-year CapEx should land between $90 billion and $95 billion.

That said, cash from operating activities hit a record $46.9 billion over the trailing twelve months, and Maxson noted that new data center projects tend to convert to strong free cash flow fairly quickly once they ramp up.

Interest coverage also remains manageable, with EBITDA covering interest expense by 6.6 times.

For investors, the takeaway is that Oracle is spending heavily now to capture AI infrastructure demand, and the debt load reflects that bet.

Barclays clearly believes the demand backdrop and the improved funding mix justify the higher price target, even with CapEx running hot.

Guidance points to more growth ahead

Oracle raised its full-year revenue guidance to at least $90 billion, a 34% increase from the prior year, and lifted its non-GAAP EPS guidance to $8.10.

For the second quarter, the company expects total revenue growth of 30% to 34%, with cloud revenue growth of 65% to 71%.

GPU utilization remained extremely high at 97.9% during the quarter, and Magouyrk said capacity coming up for renewal was resold at a 20% premium to prior contracts, a sign that demand for Oracle's infrastructure is not slowing down.

Oracle also announced an Investor Day in October, where management said it plans to share more detail on margins and long-term guidance.

Barclays' updated price target suggests the firm sees more room to run for Oracle stock as the company converts its growing backlog into revenue over the coming quarters.

This story was originally published by TheStreet on Sep 13, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.