Oracle Corporation, a leading enterprise software and cloud computing company, has demonstrated solid performance in the first half of fiscal 2026, with revenue and adjusted profit after tax and minority interests meeting expectations at 47% and 43% of full-year forecasts respectively. The technology giant specialises in database management systems, cloud infrastructure services, and enterprise software solutions, positioning itself as a comprehensive provider in the rapidly evolving artificial intelligence and cloud computing landscape.
Strong Performance Driven by Cloud Infrastructure Demand
The company’s financial results showcase robust momentum, with group revenue climbing 14% year-over-year, primarily propelled by Oracle Cloud’s impressive 24% annual growth. This expansion reflects the increasing enterprise demand for cloud infrastructure services as organisations continue their digital transformation initiatives. Additionally, Oracle recorded a substantial $2.7 billion pre-tax gain from divesting its interest in Ampere Computing, further strengthening its financial position.
Raised Capital Expenditure and Revenue Projections
Oracle has significantly increased its capital expenditure forecast to $50 billion for FY26, representing a $15 billion upward revision from the first quarter projection. This substantial investment reflects the company’s commitment to expanding its data center infrastructure to meet growing demand. The company has also raised its FY27 revenue guidance by US$4 billion, supported by higher remaining performance obligations this quarter.
For the third quarter of FY26, Oracle projects group revenue growth of 16-18%, with Oracle Cloud expected to accelerate dramatically to 37-41% year-over-year growth, compared to 25% in the previous year. Adjusted earnings per share are anticipated to increase 16-18% to US$1.70-US$1.74.
Investment Outlook and Strategic Position
Phillip Securities Research maintains a BUY recommendation with a slightly adjusted DCF target price of $344, down from the previous $350, primarily due to the increased capital expenditure requirements. The research firm expects performance acceleration in the second half of FY26 as additional data centres become operational.
Oracle’s strategic positioning as a specialized Oracle Cloud Infrastructure provider and comprehensive AI solutions company, backed by a significant remaining performance obligations backlog, supports the positive outlook. The company’s potential upside depends largely on the successful execution of multi-billion-dollar artificial intelligence deals.
Frequently Asked Questions
Q: What were Oracle’s key financial highlights for the first half of FY26?
A: Oracle’s 1H26 revenue and adjusted PATMI were within expectations at 47% and 43% of FY26 forecasts respectively. Group revenue rose 14% year-over-year, led by Oracle Cloud’s 24% growth, and the company recorded a $2.7 billion pre-tax gain from selling its Ampere Computing interest.
Q: How much has Oracle raised its FY27 revenue guidance?
A: Oracle has raised its FY27 revenue guidance by $4 billion following higher remaining performance obligations this quarter.
Q: What is Oracle’s current capital expenditure projection for FY26?
A: Oracle has increased its FY26 CAPEX projection to $50 billion, which is $15 billion higher than the 1Q25 forecast
Q: What growth rates does Oracle expect for Q3 FY26?
A: For 3Q26, Oracle expects group revenue growth of 16-18%, with Oracle Cloud accelerating to 37-41% year-over-year growth, up from 25% a year ago. Adjusted EPS is projected to rise 16-18% to $1.70-1.74.
Q: What is Phillip Securities Research’s recommendation and target price for Oracle?
A: Phillip Securities Research maintains a BUY recommendation with a DCF target price of $344, down from the previous $350 due to increased CAPEX requirements.
Q: What factors support Oracle’s positive outlook according to the research?
A: Oracle’s position as a niche Oracle Cloud Infrastructure provider and full-stack AI provider, supported by a significant remaining performance obligations backlog, supports the bullish outlook. The company is expected to benefit from acceleration in 2H26 as more data centers come online.
Q: What could drive potential upside for Oracle’s stock?
A: Potential upside for Oracle hinges on faster execution of multi-billion-dollar artificial intelligence deals, which could accelerate the company’s growth beyond current projections.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
Disclaimer
These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance.
Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries.
The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.
Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
