Oracle Stock Upgrade Spurs Funding Rethink

The Oracle stock upgrade (ORCL) by DA Davidson on Feb. 9, 2026, followed the company’s large bond offering and announced financing program to expand AI data centers. Analysts view this funding clarity as a potential catalyst for cloud revenue growth.

Analyst Upgrade and Price Targets

DA Davidson raised Oracle to Buy from Neutral, arguing the market had overreacted to concerns about AI spending and that a clearer OpenAI funding outlook removes a key overhang on the cloud story. The upgrade reflected sentiment shifts rather than changes in Oracle’s underlying cloud opportunity.

Analyst price targets vary widely, with a consensus average of $285.76 and a range from $180 to $400. The distribution of ratings is roughly even among bullish, cautiously bullish, and indifferent. Bernstein holds a higher target of $313 with an Outperform rating, while DA Davidson’s model implies a $180 target based on about 23 times 2027 earnings.

Results, Backlog, and Growth Outlook

Oracle’s Q2 fiscal 2026 revenue reached $16.1 billion, up 14.0% year-over-year. Oracle Cloud Infrastructure (OCI) revenue rose 66.0% to $4.1 billion. Remaining performance obligation (RPO) stood at $523 billion as of early 2026, with about $300 billion linked to OpenAI. Management projects OCI to grow roughly 71.0% annually, reaching $144 billion in revenue by fiscal 2030.

Funding Plan and Balance Sheet

Oracle completed a $25 billion senior unsecured bond sale early in 2026 that attracted record demand. The company plans a 2026 capital raise of $45 billion to $50 billion, split roughly evenly between $20 billion to $25 billion in additional debt and a similar amount in equity-linked or common equity instruments. This funding will support AI data-center expansion through fiscal 2028.

Balance-sheet metrics show elevated near-term financing needs. Total debt estimates range from $130 billion to $175 billion. Trailing twelve-month free cash flow was negative $13.1 billion, and capital expenditures for fiscal 2026 are set at $50 billion. Interest expense is projected at about $1 billion per quarter in Q2, rising to roughly $1.6 billion per quarter by Q4. Issuances could dilute existing shareholders by approximately 5.0%. Oracle’s 15.0% stake in the U.S. TikTok joint venture, valued in the low billions, is expected to contribute about $1 billion of OCI revenue annually.

Taken together, analysts say the upgrade, bond sale, and planned capital raise narrow a near-term funding overhang and provide investors clearer assumptions for evaluating Oracle’s AI infrastructure rollout. This clarity could prompt a re-rating of the company’s cloud recovery if execution aligns with the plan.