After Oracle (ORCL) yesterday announced several large cloud deals, including one that will contribute greater than $30B in annual revenue starting in FY28, Citi thinks the large contract in reference could be Stargate/OpenAI related. Shares were up 4% yesterday and while the deal announcement is “clearly an incremental positive” that de-risks the FY26 guidance, the firm believes this contract was already embedded in the outlook given the deal closed less than a month after reporting Q4. The firm maintains a Neutral rating on Oracle, with a bullish view on OCI demand, but concerns around profitability and valuation.
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