Oracle Corp (NYSE:ORCL, XETRA:ORC) is approaching its fiscal fourth-quarter earnings with analyst expectations running high, as cloud infrastructure growth looks poised to reaccelerate on the back of AI-driven demand and easing capacity constraints.
Jefferies analysts maintained a Buy rating and $320 price target on the stock ahead of the print, citing what they describe as a strong "Mardi Gras" setup for Oracle's seasonally important Q4. The firm is watching for 90% year-over-year growth in Oracle Cloud Infrastructure, a 43% operating margin, and approximately $36 billion in net remaining performance obligation adds as the key benchmarks for the quarter.
Cloud revenue has been on an upward trajectory, with fourth-quarter growth guided to 44% to 48% year-over-year, excluding foreign exchange, compared with 41% in the third quarter and 33% in the second quarter. Total revenue growth is guided at 18% to 20% ex-FX, accelerating from 18% in Q3.
OCI growth is expected to remain strong through fiscal 2027, and notably, the near-term ramp does not yet include contribution from the OpenAI contract, which is not expected to kick in until the second half of fiscal 2027. That implies the current acceleration is being driven by non-OpenAI GPU-intensive compute and improving momentum in core OCI and database-as-a-service offerings.
Margin trajectory remains a mixed picture. Street estimates already bake in roughly 300 basis points of operating margin deleverage in fiscal 2027 as the higher-cost OCI business grows as a share of revenue. Jefferies sees some upside to that bar, pointing to recent workforce reductions and operating expense discipline as offsets, though the firm still expects consolidated margins to drift from the mid-40s toward the mid-to-high 30s over time.
Investor attention will also fall on new CFO Hilary Maxson, who heads into her first Oracle quarter after serving as Group CFO at Schneider Electric. Analysts note her previous role was in a less capital-intensive business model, and the market will be watching how she frames capital intensity, returns, and funding strategy at Oracle.
Oracle shares are up approximately 10% year-to-date, outperforming the IGV software index, which is down 9% over the same period.