Oracle is upgraded to buy by Stifel, which attributes its ambitious $250 price target to booming cloud growth and frugal spending.

On Monday, Stifel raised its price objective for Oracle (NYSE:ORCL) from $180.00 to $250.00, upgrading it from Hold to Buy. The upgrading occurs as Oracle's stock, which is now trading close to its 52-week high of $216.93, has produced an outstanding 50.56% return over the last 12 months. The firm has a significant market valuation of $590.53 billion, according to data from InvestingPro.

Oracle's recent sharp rise in capital expenditure and RPO (Remaining Performance Obligation) gains, which support management's growth expectations for the company's Cloud Infrastructure and SaaS-Apps businesses, coincided with the upgrade, according to Brad Reback, an analyst at Stifel. According to InvestingPro's analysis, Oracle is still moving well, as seen by its 8.38% revenue growth over the previous 12 months. Examine InvestingPro's in-depth study report for more details on Oracle's growth metrics as well as 19 more professional suggestions.

Stifel projects a growth of around 16% in fiscal year 2026 and 20% in fiscal year 2027, indicating that these cloud gains would accelerate overall revenue increases in the upcoming years.

Stifel pointed out that Oracle's management team has proven adept at controlling costs, even if the increased capital expenditure would result in more short-term gross-margin compression. The company pointed out that Oracle's workforce increased by just 2% in fiscal year 2025, despite a 5% increase in operational expenditures and an 8% increase in revenue. Despite trading at a somewhat high P/E ratio of 47.48x, the business retains a strong gross profit margin of 70.51%, according to data from InvestingPro.

According to Stifel, Oracle should be able to overcome revenue mix shift headwinds and post accelerating EPS growth in fiscal year 2027 and beyond by combining sustainable cloud growth with operating expense discipline. The new price target is roughly 30 times Stifel's revised fiscal year 2027 EPS estimate of $8.35.