Oracle's AI Ambitions Face Cloudy Outlook Amid Valuation Worries

Oracle's Q1 earnings beat expectations, with revenue guidance of at least $90 billion for 2027 and adjusted EPS of $8.1.

The company continues to capitalize on AI workload demand, with a 46% jump in remaining performance obligations (RPO) year-over-year.

Jefferies' senior analyst Brent Thill maintains a Buy rating on Oracle shares, with a price target of $290 indicating potential upside of 80%, and a long-term path to $400 if earnings power hits management's $20 level.

However, Thill ranks Microsoft, Amazon, and Alphabet ahead of Oracle as primary long-term holdings due to their stronger balance sheets, better core multiples, and deeper market penetration.