Oracle: Cloud Applications and Infrastructure Expected to Fuel Fiscal 2026 Targets

Oracle hosted its analyst day today, reiterating its fiscal 2026 non-GAAP targets given last year and highlighting where specific opportunities lie—stressing cloud applications and infrastructure in particular. We think Oracle’s profitability and EPS goals for three years from now are realistic, well-justified, and even slightly conservative. Nonetheless, we think revenue projections will be shy of targets even as we don’t deny ample opportunity, but we do question Oracle’s ability to win rates in the face of such opportunity while operating in a heated competitive environment. As a result, we believe Oracle shares are overvalued given our fair value estimate of $76 per share for the narrow-moat firm, which we continue to believe is undergoing switching cost vulnerability amid cloud migrations.