Bernstein believes Oracle is in a new high-intensity investment cycle, with its cloud business, especially second-generation cloud infrastructure and AI data centers, driving accelerated growth in revenue, profit, and free cash flow, potentially making it one of the world's top three hyperscale cloud vendors. Cloud infrastructure revenue is projected to reach approximately $18.1 billion in fiscal year 2026, a 77% year-over-year increase, with AI revenue estimated at approximately $6.6 billion. While massive capital expenditures will depress gross margins and create financing needs, the high-margin database, multi-cloud, and enterprise software businesses can partially offset this. Bernstein maintains its "Outperform" rating with a target price of $325. (The above views are from Bernstein's September 2nd report.)
