Oracle (NYSE: ORCL) shares rose 3% in early trading Friday after gaining nearly 7% in after-hours trading Thursday, following the release of new figures on the company’s cloud business, AI contracts and revenue backlog.

Oracle exceeded Wall Street forecasts for its fiscal first quarter. A $26 billion increase in its backlog also helped ease some concerns about the amount the company is spending on AI infrastructure.

Oracle reported revenue of $19.35 billion, approximately 30% higher than a year earlier. Adjusted profit increased 30% to $1.92 per share. Cloud revenue rose 62% to $11.61 billion, while cloud infrastructure sales surged 121%. The company also added 850 megawatts of data-center capacity during the quarter.

Oracle adds AI contracts as cloud infrastructure revenue climbs 121%

Oracle had approximately $664 billion in remaining performance obligations at the end of the quarter. The figure represents contracted revenue that the company has not yet recognized and was $209 billion higher than a year earlier. Because remaining performance obligations are recognized over time, the measure gives visibility into contracted demand but does not represent revenue already recorded in the quarter. Analysts are also tracking how quickly those contracts convert into reported sales and what investment is needed to serve them. Oracle also secured more than $30 billion in AI cloud contracts.

In its financial report, the company said, “the customer demand for AI Cloud Training and Inferencing Services continues to outpace supply.” Oracle expects to generate at least $90 billion in total revenue in fiscal 2027.

Deutsche Bank (NYSE: DB) maintained its Buy rating on Oracle and a $300 price target. The bank said the new AI contracts included prepaid agreements and bring-your-own-hardware deals that apparently would not require additional investment from Oracle. Deutsche Bank also noted that Oracle had completed its $20 billion at-the-market equity program.

Morgan Stanley (NYSE: MS) maintained an Equal Weight rating and a $210 target, citing the following assessment: “Oracle’s 1Q delivered a near-term proof point on [IaaS] execution, as Cloud Infrastructure grew 121%.”

Citi (NYSE: C) kept its Buy rating, a $330 target and its Positive Catalyst Watch. The bank said, “Given the magnitude of FQ1 outperformance, we see a favorable setup for upward revisions at Investor Day and AI World.” Citi’s target is based on approximately 30 times fiscal 2028 earnings and slightly higher estimates.

Bernstein maintained an Outperform rating and a $325 target. The firm cited higher revenue, a larger contract book, margins and Oracle’s increased fiscal 2027 outlook. Bernstein rolled its estimates forward but lowered the earnings multiple in its model to 23.5 times from 24.5 times after software valuations moved lower.

Wall Street targets remain elevated as funding and margins stay under review

Wells Fargo (NYSE: WFC) maintained its Overweight rating and a $280 target. The bank said Oracle could bring in new contracted work and growth opportunities without automatically creating another cash outflow. It also said management remained confident in its fiscal-year targets without making a large increase to guidance. Wells Fargo identified A-day as the next catalyst.

Barclays (NYSE: BCS) kept its Overweight rating and a $252 target. The bank pointed to annual growth reaching 30%, compared with 21% in the first-quarter comparison. It also said Oracle’s funding position had improved after the completion of the $20 billion equity raise, while management addressed questions about delays and margins.

UBS (NYSE: UBS) maintained its Buy rating and a $250 price target. The bank said the stock’s after-hours performance reflected better-than-expected revenue and profit, faster cloud infrastructure growth and a successful equity sale. UBS identified Oracle’s unchanged fiscal 2027 revenue forecast as a negative factor and said AI-driven growth had shifted to 30% from 11% one year earlier.

Bank of America (NYSE: BAC) maintained its Buy rating and a $240 price target, basing its view on faster adoption of Oracle Cloud Infrastructure. However, the bank also noted limited visibility into Oracle’s profitability and return on capital investment, despite the growth in OCI revenue, which indicates significantly higher demand.

JPMorgan (NYSE: JPM) maintained its Overweight rating and set a December 2027 target of $200, replacing its previous December 2026 target of $210. The bank expects revenue from additional capacity to drive higher profit growth while margins remain similar. JPMorgan also sees potential for Oracle’s discount to peer valuations to narrow.