Oracle (ORCL, Financials), a business software and cloud computing company known for its database technology and enterprise systems, could see stronger-than-expected cloud revenue in fiscal 2027, according to Piper Sandler.
The firm believes Oracle's heavy spending on cloud infrastructure could start showing up more clearly in sales as new capacity comes online.
Analyst Billy Fitzsimmons estimates Oracle could add about 2,400 megawatts of cloud capacity during fiscal 2027. Based on the firm's calculations, that expansion could generate roughly $23 billion in new Oracle Cloud Infrastructure revenue.
That is above Piper Sandler's current estimate of $20.8 billion and could add about $2.2 billion to OCI revenue for the year.
If the estimate holds, Oracle's fiscal 2027 OCI revenue could reach $41.1 billion. That would give cloud growth an additional tailwind as demand for computing infrastructure remains tied to rising AI workloads.
For investors, the question is whether Oracle can turn its large infrastructure spending into revenue quickly enough to support growth and justify the cost of expanding its data centers.
Piper Sandler kept an Overweight rating on Oracle with a $225 price target.
The next focus will be how quickly Oracle brings new cloud capacity online and whether customer demand is strong enough to fill it.