BofA raised the firm’s price target on Oracle (ORCL) to $220 from $156 and keeps a Neutral rating on the shares. Q4 cloud subscription growth of 27% was driven by SaaS growing 14% year-over-year in constant currency, notes the firm, which says it is “encouraged” by accelerating growth that is now in line with other application peers at the mid-teens. The company’s “impressive” RPO guidance backs sustained momentum, but meaningful investment drives the capex outlook higher, notes the analyst. Clearly the pipeline for OCI and AI deals is trending well, but what is not clear is the trajectory of profitability, with ramping capex likely to weigh on gross margin, the firm added.
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