Bank of America Sets $200 Oracle Target Citing $553 B AI Cloud Backlog
Bank of America reinstated Oracle at Buy with a $200 price target implying 30% upside, citing accelerating AI infrastructure demand and a $553 billion backlog of performance obligations. BofA forecasts Oracle’s capex to surge to $50 billion in fiscal 2026 and remain elevated through FY29, keeping free cash flow negative despite 17%–46% revenue growth.
1. Coverage Reinstatement
Bank of America reinstated coverage of Oracle at Buy with a $200 price objective, implying roughly 30% upside as the firm views Oracle’s shift to AI infrastructure and cloud services as a key growth driver.
2. $553 B Performance Obligations
Oracle holds $553 billion in remaining performance obligations tied to long-term AI training and cloud infrastructure contracts, offering solid revenue visibility while posing execution challenges around data-center readiness, GPU deliveries and partner integration.
3. Capital Expenditure and Cash Flow Outlook
Oracle plans capex of about $50 billion in fiscal 2026, rising through FY29, which is projected to keep free cash flow negative during the investment cycle even as revenue is forecast to grow 17%, 33% and 46% over FY26–FY28.