Scotiabank lowered its one-year price objective for Oracle to $220 from $260 and maintained a Sector Outperform rating on the shares. The move follows Oracle's announcement of a substantial capital program and comes as the stock has moved notably lower in recent months.
Oracle shares are currently trading around $160.06, having declined 8.48% in the past week and 34.23% over the previous six months from a 52-week high of $345.72. Those price moves reflect heightened investor attention to the scale and financing of Oracle's Oracle Cloud Infrastructure - OCI - expansion.
Scotiabank said the company’s announced capital plan, sized at $45-50 billion, helps address some investor concerns around the magnitude of the OCI buildout. At the same time, the bank trimmed its earnings-per-share estimates for Oracle by 0.6% for fiscal year 2026 and by 2.5% for fiscal year 2027. Scotiabank noted the new capital program should provide Oracle with runway through early fiscal 2028, but it said questions about medium-term financing remain.
In its assessment, the bank set out several conditions that would be necessary for Oracle shares to perform more strongly. Those conditions include successful execution on five large-scale data center projects currently under construction, confidence that OpenAI will deliver on its commitments to Oracle, and demonstrable progress on new foundation models.
Scotiabank also placed Oracle fourth within its ranking for AI Accelerated Cloud services. The bank cited Oracle's technical capabilities in GPU-as-a-service, its ability to raise capital and the advantage of not competing with its AI customers as factors that support the company's positioning in the market for cloud AI services.
Separately, Oracle outlined a financing plan in the $45-50 billion range intended to expand its cloud infrastructure capacity to meet contracted demand from large customers, including Meta, NVIDIA and OpenAI. The funding strategy described by the company is a mix of debt and equity financing, with an expressed intent to preserve an investment-grade credit rating.
Analysts across the industry issued or updated their views following Oracle's financing announcement. UBS lowered its price target to $250 while keeping a Buy recommendation, citing the need to fund AI infrastructure in 2026. Barclays reiterated an Overweight rating with a $310 price target and noted the plan contemplates raising a substantial portion of funds via equity and equity-linked issuances. Guggenheim and Jefferies both maintained Buy ratings and left their price targets at $400, viewing the funding plan as constructive for Oracle's cloud expansion.
Despite the recent share-price volatility, valuation analysis indicates Oracle remains slightly undervalued versus its Fair Value. The company has preserved robust top-line momentum, with revenue growth measured at 11.07% over the past twelve months.
Implications for markets and sectors - The developments are most relevant to the cloud-infrastructure and enterprise-software sectors, with potential knock-on effects for capital markets given the scale of prospective debt and equity issuance. Investors and credit markets will be watching execution on data centers and the mix of financing that Oracle pursues.