- 4Q26 revenue met our expectations while PATMI exceeded, FY26 revenue and PATMI at 101%/115% of our forecasts. Revenue rose 21% YoY, led by Oracle Cloud revenue growth (+47% YoY).
- Strong revenue visibility with RPO contracted rose 4.6x to US$638bn. Revenue to accelerate to 34% YoY in FY27e (FY26: 16%), driven by Cloud Infrastructure business surging 109% (1Q27e additions are nearing 1GW, close to FY26’s full‑year 1.2GW). OpenAI’s five‑year US$300bn OCI commitment starts in 2027, with its IPO expected to bolster capital for FY27e obligations. The five largest Stargate sites are on track, with the Abilene, Texas campus 42% complete and set for 1.2 GW by end‑2026. Four more sites across Texas, New Mexico, Michigan, and Wisconsin are under construction, with deliveries starting in 2027, scaling total capacity to 7 GW toward a 10 GW target.
- We maintain a BUY rating with a lower DCF target of US$237 (prev. US$275), as we raised CAPEX to US$70bn in FY27e as guided (net of US$20–25bn in customer prepayments), from our initial estimates of US$47bn. Our WACC and g remain unchanged. Customers likely continue to favour Oracle’s end-to-end stack (infrastructure to cloud). US$75bn in bookings under the new funding model over two quarters (12% of RPO) underscores strong customer preferability for Oracle despite prepayments and bring-your-own-hardware requirements.
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