Why analysts are 'in shock' and 'blown away' by Oracle

The firm blew analysts away with its growth outlook.

It was a very good day for Oracle (NASDAQ: ORCL) stock, as the cloud computing giant saw its share price spike some 42% to more than $343 per share on Wednesday after the company delivered fiscal Q1 earnings.

The surge netted Oracle founder and chairman Larry Ellison about $110 billion. Bloomberg reported that Ellison surpassed Elon Musk as the world’s richest person with $393 billion in net worth, but Forbes said Musk remains the wealthiest with $428 billion.

The massive gain for Oracle stock was not driven so much by the first quarter results, which missed estimates. Rather, it was the unexpectedly robust outlook that blew investors and analysts away.

• Revenue of $14.9 billion, up 12% year-over-year, but it fell short of estimates of $15.0 billion.
• Net income of $2.9 billion, flat compared to Q1 of fiscal 2025.
• Earnings of $1.01 per share, down from $1.03 per share a year ago.
• Adjusted earnings of $1.47 per share, up from $1.39 per share a year ago but below estimates of $1.48 per share.

Oracle’s cloud revenue jumped 48% year-over-year to $7.2 billion. Within that, its multi-cloud revenue — where its cloud infrastructure runs on other hyperscalers platforms, like Microsoft, Amazon, and Google — skyrocketed more than 1,500%. And there’s much more growth ahead.

“We’re all kind of in shock”

The first quarter may have disappointed analysts, but the outlook shocked them.

I think we’re all kind of in shock in a very, very good way,” Brad Zelnick, research analyst at Deutsche Bank said on the earnings call.
“Listen, even I am sort of blown away by what this looks like going forward,” John DiFucci, research analyst at Guggenheim Securities, said.

The effusive comments stemmed from the growth outlook over the next few years. In Q1, CEO Safra Katz said the company signed four multi-billion-dollar contracts with three different customers.

“This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter—and demand for Oracle Cloud Infrastructure continues to build,” Katz said. The RPO (remaining performance obligation) backlog is contracted revenue that has not yet been billed.

Staggering revenue growth

Katz said Oracle expects to sign several more multi-billion-dollar customers over the next few months. That will boost the RPO to more than $500 billion.

These projections will lead to massive revenue increases over the next few years, explained Katz.

In fiscal 2026, Oracle anticipates cloud infrastructure revenue to grow 77% to $18 billion. That is anticipated to almost double to $32 billion in fiscal 2027 and more than double again to $73 billion in fiscal 2028. In 2029 that will rise to $114 billion and in 2030 it will jump to $144 billion. That’s a staggering 700% increase over fiscal 2026 projections.

Most of the revenue in this 5-year forecast is already booked in our reported RPO,” Katz said. “Oracle is off to a brilliant start to FY26.”

Oracle got a slew of price target upgrades, including Cantor Fitzgerald, which raised it to $400 per share and TD Cowen which boosted it to $375.  Those projections would be 15% to 23% higher than the current share price. Oracle stock is already up 95% YTD.

That type of growth, even with a forward P/E of 35, is shocking indeed.