Wall Street institutions support Oracle Corporation (ORCL.US), emphasizing that its AI business growth potential will far exceed market expectations.

On Thursday, despite Oracle Corporation's (ORCL.US) quarterly performance being mixed, leading to a stock price drop of over 14%, several Wall Street institutions have stood by this IT giant, emphasizing the company's growth potential in the artificial intelligence business will surpass market expectations. Due to the significant drop in Oracle Corporation's stock price, other AI-related tech stocks such as Microsoft Corporation (MSFT.US), NVIDIA Corporation (NVDA.US), AMD (AMD.US) are also under pressure. Wedbush Securities analyst Dan Ives stated that investors should not focus too much on slightly lower-than-expected revenue figures, but should pay attention to the company's "Remaining Performance Obligations" (RPO) on the balance sheet. Oracle Corporation's RPO for this quarter reached $523 billion, significantly higher than Wall Street's previous estimate of $500 billion. Ives pointed out that the new RPO for this quarter reached $69 billion, compared to $8 billion, $33 billion, and $2 billion in the previous quarters. "This is the core indicator we are most concerned about, rather than the revenue performance for this quarter or the next," he wrote in a report. "In the long term, these AI-related backlog orders will stunning revenue growth in the coming years: a growth of over 17% in the 2026 fiscal year, around 35% in the 2027 fiscal year, and about 45% in the 2028 fiscal year." In its financial report, Oracle Corporation reiterated its revenue guidance for the 2026 fiscal year to be $67 billion, in line with the market consensus. The company's management stated in a conference call that the newly added large RPO will gradually monetize in the future and will convert into revenue in a short period of time. The company expects an additional revenue contribution of approximately $4 billion in the 2027 fiscal year. Addressing market concerns that Oracle Corporation may need to raise significant debt to expand its AI computing power and data center capabilities, Ives stated that these concerns are exaggerated. He mentioned that the actual amount of financing needed by Oracle Corporation may be much lower than the rumored $100 billion. "From our perspective, this is a 'high-quality problem' because the demand is so strong, and this is a challenge the company must address in the AI wave." BNP Paribas analyst Stefan Slowinski shares a similar viewpoint and stated that Oracle Corporation's performance this quarter, especially in cloud infrastructure (OCI) revenue, has relieved the market. He noted that despite concerns about possible delays in the key data center Abilene construction, OCI achieved a growth of 66% this quarter, surpassing expectations when calculated at fixed exchange rates. He added that due to a surge in capital expenditures (reaching $12 billion this quarter, 46% higher than market expectations), free cash flow decreased to -$10 billion, reflecting strong investment in OCI expansion and no signs of data center construction delays. Slowinski gave Oracle Corporation a "buy" rating and maintained a target price of $290.