BMO Capital has reduced its price target for Oracle (NYSE:ORCL) to $205.00 from $270.00, while maintaining an Outperform rating on the shares. Oracle stock was trading at $151.80 at the time of the note, a substantial drop from its 52-week high of $345.72. According to InvestingPro data cited in the research, the stock declined 10.49% over the most recent week.
The analyst action follows Oracle’s multi-part capital raise, which included offerings of debt, preferred equity, and common equity. BMO emphasized the strength of demand for the company’s debt issuance, reporting that investor interest reached roughly $125 billion versus the $25 billion that Oracle had offered.
BMO Capital analyst Keith Bachman commented on the reception to the debt sale, saying: "We find it encouraging that there was meaningful demand for Oracle’s debt offering at ~$125 billion vs the $25 billion offering." Despite lowering his firm’s earnings-per-share forecasts, Bachman and BMO view the financing as constructive for the company’s outlook.
The research firm noted that the capital raise should remove an overhang on the stock, and that Oracle is unlikely to require additional financing during calendar year 2026. Those conclusions underpinned BMO’s decision to preserve its Outperform rating even as the price target was reduced.
Other company-level financing activity reported alongside the BMO note included a $5 billion mandatory convertible preferred stock offering, which was met with strong demand and was multiple times oversubscribed. That preferred-stock offering was allocated between long-only investors and hedge funds, including convertible arbitrage funds.
Separately, Oracle is pursuing new investors for billions of dollars in loans tied to its data center construction projects. Those loans are collateralized by future leases connected to Oracle’s $300 billion agreement with OpenAI. Oracle Financial Services has also rolled out a set of AI-driven applications for retail banking, intended to improve customer interactions and internal business processes.
In the analyst community, Scotiabank lowered its price target for Oracle to $220 from $260 while maintaining a Sector Outperform rating; the firm cited concerns related to the buildout of Oracle Cloud Infrastructure as the rationale for the cut. In a related development involving another enterprise software company, TD Cowen flagged the expansion of Salesforce’s contract with the U.S. Army as materially increasing the company’s potential total addressable market.
Oracle’s share-price volatility reflected in recent declines obscures company-scale revenue and growth figures: annual revenue stands at $61.02 billion with growth of 11.07%. Over the last six months the stock has fallen 38.48%.
Key points
- BMO cut Oracle’s price target to $205 from $270 but maintained an Outperform rating, signaling continued confidence in the business despite a lower valuation target.
- Investor demand for Oracle’s debt was substantial, about $125 billion versus the $25 billion offering, and the company completed a $5 billion mandatory convertible preferred offering that was multiple times oversubscribed.
- Oracle is seeking financing partners for data center construction loans backed by future leases tied to its $300 billion agreement with OpenAI; the company also launched AI applications for retail banking.
Risks and uncertainties
- Cloud infrastructure execution - Scotiabank cited concerns about Oracle Cloud Infrastructure buildout, which contributed to its own price target cut; this impacts the cloud and enterprise software sectors.
- Financing and project funding - Oracle is looking for new investors for loans tied to large-scale data center construction, creating exposure in infrastructure financing and commercial real estate-backed lending markets.
- Market and share-price volatility - The stock has experienced meaningful declines over both the past week and six months, presenting market risk for equity investors in technology and enterprise software sectors.