Citigroup upgraded Oracle (ORCL.N) to a Buy rating, with a target price raised to $410.

Jin10 data reported on September 11 that Citigroup published a research report upgrading Oracle's (ORCL.N) rating from neutral to buy, as the record-breaking orders in the first quarter enhanced the bank's confidence in the sustainability and profitability of its AI business. The over $330 billion in orders in the first quarter was impressive, accompanied by a significant upward revision of Infrastructure as a Service (IaaS) revenue (projected to grow sixfold to $114 billion over the next three years, higher than the bank's estimate of $87 billion). Citigroup also noted that concerns regarding Oracle's profitability have been better addressed, with the company's guidance for EBIT growth in fiscal 2026 at mid-teens, above the bank's estimate of 6%. Based on the bank's positive outlook on AI infrastructure demand, Citigroup believes that Oracle's stock price still has upside potential, with revenue and net profit growth expected to accelerate significantly in the coming years, further establishing Oracle's position as a unique large AI winner. Citigroup stated that after the impressive order numbers and far better-than-expected earnings outlook, they have significantly raised their estimates, particularly for fiscal 2028's IaaS, total revenue, and earnings per share, which have been raised by 52%, 23%, and 24%, respectively. Given the short-term demand for AI infrastructure and the significant growth in RPO, the target multiple has increased to 37 times. Therefore, the target price has been raised from $240 to $410; the target price is based on a non-GAAP earnings per share of $11.11 for fiscal 2028 at an approximate 37 times price-to-earnings ratio.