Bank of America Maintains $240 Oracle Target as Data Center Costs Rise

Bank of America Securities analyst Tal Liani reiterated a Buy rating and $240 12-month price target for Oracle Corporation (ORCL) on Oct. 20 as data center expansion lifted spending.

The target stood 83.2% above Oracle’s Oct. 20 closing price of $131.03 at about 4 p.m. ET (20:00 UTC). That percentage compares a 12-month forecast with one day’s closing price; it is not a return shareholders have earned.

Oracle’s cloud infrastructure revenue reached $7.4 billion in fiscal Q1 2027, the quarter ended Aug. 31, 2026. That was a 121% increase from a year earlier. The growth came as Oracle expanded the data center capacity needed to serve its cloud business.

The company had $664 billion in remaining performance obligations at the end of the quarter. The figure represents contracted business that Oracle has yet to recognize as revenue, rather than sales already earned. Oracle expects to recognize about 13% of that balance over the 12 months following Aug. 31, leaving most of it for later periods.

Building that capacity has required substantially more spending. Quarterly capital expenditures rose to $28.5 billion from $8.5 billion a year earlier, an increase of $20 billion. Oracle recorded a $5.4 billion non-GAAP free cash flow deficit for the quarter.

Oracle also had $288 billion in additional lease commitments as of Aug. 31. Substantially all were tied to data centers, and the commitments were not reflected on its balance sheet. Together with the capital spending, those commitments show the scale of the capacity buildout behind Oracle’s contracted business.

Oracle expects capital expenditures in fiscal 2027 to exceed fiscal 2026 levels as it continues expanding data center capacity.