Stifel reiterates Oracle stock Buy rating amid data center progress

Stifel has reaffirmed its Buy rating on Oracle Corp. (NYSE:ORCL) following advancements in the company's Project Jupiter data center construction in New Mexico. The stock is currently priced at $147.61, down 52% over the past year, yet an InvestingPro analysis suggests Oracle to be undervalued with a PEG ratio of 0.5.

Analysts project sales growth for Oracle in the current year, with recent quarters showing a revenue increase of 22%. Mahesh Thiagarajan, Oracle Cloud Infrastructure VP, reported that Project Jupiter is 26% complete, a significant improvement from the 9% completion rate in Oracle's July update. He also highlighted challenges such as the fuel-cell microgrid site being only 10% finished and ongoing issues with air and water-quality permits as well as gas pipeline authorization.

A recent ruling by the New Mexico Supreme Court has cleared two legal roadblocks for Project Jupiter. The court unanimously denied a petition from the New Energy Economy seeking cancellation of the air quality permit hearing and also dismissed the Center for Biological Diversity's challenge to the state's emergency authorization for water well access in Santa Teresa. These decisions allow developers to resume pumping from the well following a three-week suspension.

In addition to Project Jupiter's progress, Oracle Corporation recently reported its first-quarter 2027 earnings, exceeding revenue and earnings per share expectations. The company's cloud infrastructure grew by 120% year-over-year in constant currency, according to DA Davidson. Despite strong performance, Stifel and Freedom Broker have lowered their price targets to $200 and $205 respectively while maintaining a Buy rating due to margin concerns.

Oracle's AI infrastructure build is also expanding, with revenue more than doubling, as noted by Freedom Broker. The company absorbed a $20 billion equity program within the quarter, resulting in net debt decrease despite record capital spending. Bernstein has reiterated an Outperform rating, praising Oracle's solid execution and clear communication of fiscal year 2030 targets.

Overall, Oracle's recent developments reflect a combination of strong growth and strategic challenges, as evidenced by the diverse analyst ratings and price targets.