Bernstein Revises Oracle Stock Price Target After Earnings
On June 12, Oracle's (ORCL) earnings beat ran straight into what has apparently been a wall of investor worry.
Wall Street had been looking for proof that Oracle's cloud infrastructure business was still riding the AI boom, and the company delivered plenty of it.
Revenue surged, Oracle Cloud Infrastructure jumped, and backlog climbed to a staggering $638 billion.
However, investors were looking elsewhere.
In fact, according to The Times, Oracle stock fell as much as 12% on Thursday after earnings, wiping out more than $70 billion in market value.
Investors wanted AI momentum, but Oracle handed them a massive funding question.
Bernstein analyst Mark Moerdler stayed bullish, raising his Oracle price target to $325 from $319 and keeping an Outperform rating.
He feels that the long-term plan remains intact, even after the stock sold off on capex and financing concerns.
However, even though Oracle has AI demand, investors now want proof that it can turn that demand into cash.
What Bernstein said after Oracle earnings
Bernstein didn't treat Oracle's post-earnings selloff as a broken thesis.
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The old expectation was that investors needed Oracle to prove its AI cloud story was still growing without creating a bigger funding problem.
The company posted strong growth, but the market quickly shifted its attention to capex, debt, and another planned capital raise.
For perspective, here's how Oracle held up:
- Oracle reported fiscal Q4 non-GAAP EPS of $2.11, beating estimates by $0.15.
- Revenue rose 20.8% year-over-year to $19.2 billion, topping consensus by $110 million.
- Remaining performance obligations hit a record $638 billion, jumping $85 billion in the quarter from $553 billion.
- For fiscal Q1 2027, Oracle expects total revenue growth of 27% to 29%, while total cloud revenue is expected to grow 58% to 64% in U.S. dollars.
- For full fiscal 2027, Oracle confirmed its $90 billion revenue target and raised non-GAAP EPS guidance to $8.05, matching consensus EPS and topping the $88.54 billion revenue estimate.
Source: Investor Relations Oracle.
That is where Bernstein's call stood out.
Analyst Mark Moerdler maintained an Outperform rating and raised his Oracle price target to $325 from $319 following the earnings report.
For color, according to TipRanks, Bernstein analyst Mark Moerdler is rated as a 5-star Wall Street analyst, ranking #499 out of 12,284 analysts tracked by the platform.
His broader track record is also strong, with a 70% success rate and an average return of 14.9% per rating.
For Oracle specifically, TipRanks shows Moerdler has an even stronger record, with an 83% success ratio.
Moerdler and his team see Oracle moving toward its long-term targets.
The firm pointed to another quarter with "no major hiccups", even as it acknowledged investor "sticker shock" around spending.
The AI backlog number investors cannot ignore
Oracle's most important figure in its earnings report was its backlog.
Remaining performance obligations rose by $85 billion in the fourth quarter, climbing from $553 billion to $638 billion.
That figure was up 363% from a year earlier and gives Oracle unusually large visibility into future revenue.
Oracle said most of the RPO increase in the past two quarters came from large AI contracts where customers either prepaid Oracle for GPUs or supplied the GPUs themselves. Those prepaid and customer-supplied hardware portions now total $75 billion.
That helps explain why Bernstein stayed constructive despite the selloff. The backlog suggests Oracle's AI cloud demand is not theoretical and that its clients are already making large commitments tied to infrastructure capacity.
Nevertheless, Oracle still has to turn that contracted demand into revenue, margins, and cash flow quickly enough to satisfy investors.
Why Oracle's spending plan spooked Wall Street
Wall Street soured on the cost of meeting demand for Oracle.
Oracle said fiscal 2026 operating cash flow rose 54% to a record $32 billion, but free cash flow remained negative at $23.7 billion due to a surge in cloud infrastructure spending.
That flipped the investor conversation from growth to funding.
The company also raised $43 billion in debt and $5 billion in equity during fiscal 2026. For fiscal 2027, Oracle expects to raise about $40 billion more through debt and equity, including its previously announced $20 billion at-the-market equity program.
That is a lot for investors to absorb, especially with interest rates still elevated and AI infrastructure stocks under closer valuation scrutiny.
On that, according to Seeking Alpha, Oracle stock is trading at over 22 times forward earnings, roughly 3% higher than its 5-year average.
What has to happen next for Oracle investors
Oracle's next test is no longer simply signing more AI deals.
Investors need to see whether the company can convert its backlog into revenue at the pace management has promised.
That puts extra weight on OCI growth, capacity delivery, utilization rates, and margin performance over the next few quarters.
Oracle CEO Clay Magouyrk framed the next phase as an execution test, not just a demand story
"These people are relying on what we do at Oracle to run and maintain these massive clusters every day," Magouyrk said on the call.
The company also has to show that its financing plan is controlled.
According to GuruFocus, Oracle's debt-to-equity ratio stands at 3.63 times, ranking worse than 96.99% of 2,228 companies in the software industry.
A large debt and stock raise can make sense if the new data centres quickly generate durable returns, but it becomes a problem if cash burn stays heavy or if investors see more dilution coming.
That makes fiscal 2027 guidance especially important. Oracle has pointed investors toward a much larger revenue base and stronger earnings, but the market will want evidence that the AI buildout is improving free cash flow rather than just expanding the balance sheet.
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This story was originally published June 12, 2026 at 12:18 PM.