Street View: Oracle strengthens its growth case, but spending debate lives on
ORCL•Oracle beats estimates and eases cash burn concerns
** Oracle ORCL.N beat quarterly estimates and reported a smaller-than-expected cash burn on Thursday, easing concerns that heavy AI investments would weigh on its balance sheet
** The company's shares rise over 6% to $163.59 premarket
Analysts praise growth but remain cautious on spending
** Barclays ("overweight," PT: $252) says "the Oracle investment story keeps evolving in the right direction" ** Growth continues to inflect higher and Oracle seems to be much clearer in its financing set-up — Barclays
** J.P.Morgan ("overweight," PT: $200) says triple-digit growth in the cloud infrastructure business and a jump in revenue backlog solidify the revenue path ** JPM adds that investors will likely continue to debate whether ORCL's capital spending will peak and begin easing after fiscal 2028, as strong demand for AI infrastructure and cloud services could require continued investment and keep spending elevated for longer
** Morningstar (fair value: $220) believes "on-time capacity delivery is the most important factor that transforms Oracle's mega backlog into revenue growth"
** Morgan Stanley ("equal weight," PT: $210) says Q1 provided near-term proof of Oracle's cloud growth, but gross margin pressure and a modest FY27 EPS raise leave a need for more evidence that its AI investments can deliver sustainable profits
