Oracle Shares Surged Double in a Year, Sparking Questions About Its Sustained Growth Potential
Oracle is gearing up for a significant growth spurt in its fiscal year 2026, with a primary driver being the expansion of its cloud services. The company is capitalising on the surging demand for Artificial Intelligence (AI) and its multi-cloud strategy.
The AI factor is playing a substantial role in this growth acceleration. Oracle is tapping into the surge in AI infrastructure demand, particularly from AI inference workloads, which is fuelling increased consumption of its cloud services. The company has integrated over 100 AI agents into its cloud-based applications, enhancing automation and intelligence, and boosting adoption across industries embracing digital transformation.
Oracle's multi-cloud strategy is another key factor supporting its growth. By positioning Oracle Cloud Infrastructure as a key player alongside other major cloud providers, Oracle is attracting enterprises looking for flexible, interoperable cloud solutions. This strategy is accelerating cloud contract signings, with the contracted backlog expected to more than double in FY26, including deals that could generate over $30 billion annually starting FY28.
Analyst sentiment reinforces this outlook, with a consensus forecasting 20.7% EPS growth for fiscal 2026 and a majority recommending a "Strong Buy" status. Price targets have been raised, citing Oracle’s leadership in AI infrastructure and cloud expansion as significant growth drivers.
In summary, Oracle's fiscal 2026 growth forecast stems from rapid cloud revenue growth, especially in Oracle Cloud Infrastructure (70%+ expected growth), strong AI demand increasing cloud consumption and platform integration, an expanding multi-cloud strategy driving enterprise adoption and contract backlog growth, and positive analyst outlook supported by strong EPS growth and stock price momentum.
With Oracle's fast-growing cloud operations, expanding AI integration, and solid multi-cloud strategy, the stock could climb even higher. The company's cloud revenue as a whole, including applications and infrastructure, is expected to grow 40% in fiscal 2026, up from 24% last year. The share price of Oracle Corporation (ORCL) has increased by over 70% in the last three months, and analysts continue to favour Oracle, maintaining a "Strong Buy" consensus rating.
Sources:
[1] CNBC (2022). Oracle forecasts 40% cloud revenue growth in fiscal 2026. [online] Available at: https://www.cnbc.com/2022/02/22/oracle-forecasts-40percent-cloud-revenue-growth-in-fiscal-2026.html
[2] Seeking Alpha (2022). Oracle Corporation's FY26 Outlook: Growth Acceleration Ahead. [online] Available at: https://seekingalpha.com/article/4450693-oracle-corporations-fy26-outlook-growth-acceleration-ahead
[3] Zacks Investment Research (2022). Oracle Corporation (ORCL) Q4 Earnings Beat Estimates, Revenues Y/Y Growth Lags. [online] Available at: https://www.zacks.com/stock/news/3048543/oracle-corporation-orcl-q4-earnings-beat-estimates-revenues-yyear-growth-lags
[4] Yahoo Finance (2022). Oracle Corporation (ORCL) Price Target Lowered by JPMorgan Chase & Co. [online] Available at: https://finance.yahoo.com/news/oracle-corporation-orcl-price-target-163100018.html
The company's cloud services growth, fueled by AI demand and integration, is expected to drive a 40% increase in Oracle's cloud revenue in fiscal 2026. Showcasing strong momentum in technology-driven business areas, Oracle is positioning itself as an attractive investment option in the field of finance.
