Oracle’s Next AI Push Targets the Daily Office Workload

Oracle (ORCL) wants AI to take more everyday tasks off companies' plates. To help, Oracle says its new tools will help businesses manage work in finance, human resources, and supply chains through its Fusion Cloud software. The company says its Fusion Cloud updates will let employees assign business tasks to AI and monitor the results. The goal is to reduce the manual work involved in running finance, HR, and supply-chain operations.

 

Its Fusion Companion, for example, will help coordinate transactions and workflows across applications. Meanwhile, Fusion Claw will help AI agents handle tasks such as supply planning, finding better shipping routes, and reviewing purchasing decisions. For businesses, the potential benefit is simple to understand. There’s less paperwork, fewer approvals to chase, and less time moving information between programs. If Oracle can help companies and its employees get more done, its customers may see more value in its software and have more reason to pay for it.

That’s Just One of Many New Catalysts for Oracle

For one, Oracle is holding its Investor Day on Wednesday, Oct. 28. At that event, Wells Fargo analyst Michael Turrin wants the company to discuss its capital expenditures and funding needs for the next few years. Analysts at Evercore want to hear about how Oracle plans to fund its AI expansion. RBC analyst Rishi Jaluria hopes to hear about “when margins on the AI infrastructure side will settle into the 30% to 40% range management has guided to,” according to TipRanks. 

Two, Oracle has been expanding its partnerships, which we expect to hear more about at the Investor Day conference, as well. For example, Oracle is working with Cerebras (CBRS) to speed up inference, or the process AI uses to respond to questions, make decisions, and carry out tasks. Oracle is expanding its relationship with Intel (INTC) for a multi-year collaboration to deploy Intel’s Xeon-based computing on Oracle Cloud Infrastructure (OCI). Oracle plans to build more powerful AI computing clusters using Nvidia’s (NVDA) Vera Rubin NVL72 systems. The expansion would build on Oracle’s existing infrastructure that uses Nvidia’s GB200 and GB300 systems. 

Oracle also plans to offer Nvidia’s HGX Rubin NVL8 platform, which combines eight connected Rubin graphics processors with Intel processors. And Oracle also plans to bring Google’s (GOOG) (GOOGL) tensor processing units, or TPUs, to OCI. According to Oracle, that would make it the first major cloud provider outside Google to offer them.

Earnings Have Been Strong

In its first quarter, the company posted EPS of $1.92, beating estimates by 18 cents. Revenue of $19.35 billion, up 29.7% year-over-year (YoY), beat estimates by $220 million. Analysts were looking for EPS of $1.75 on revenue of $19.13 billion. Cloud revenue jumped 62% YoY to $11.6 billion. Infrastructure revenue jumped 121% YoY to $7.4 billion. Moving forward, the company expects second-quarter fiscal 2027 revenue to grow between 30% and 34%, or from about $20.88 billion to $21.52 billion. Analysts were expecting $21.18 billion in revenue for the coming quarter.

Adjusted EPS forecast to be between $1.85 and $1.93, above the $1.89 per share midpoint. Cloud revenue is expected to grow between 64% and 70% and is expected to grow between 65% and 71%. In addition, Oracle said it now expects $90 billion in revenue for fiscal 2027, which would be above the $89.66 billion analysts were expecting. The company also expects adjusted EPS of $8.10, which is above estimates of $8.07.

What Do Analysts Say About ORCL Stock?

Overall, Oracle has a consensus “Strong Buy” rating on Wall Street. Of the 43 analysts covering ORCL stock, 31 have a “Strong Buy” rating, one has a “Moderate Buy” rating, 10 have a “Hold” rating, and one has a “Strong Sell” rating. The mean target price of $240.66 implies a potential upside of about 83% from current levels. Meanwhile, its high-end price target of $400 implies a potential upside of 204% from its current price of about $131.60.

On the date of publication, Ian Cooper did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.