‘This Is About AI Spending,’ Says Barclays on Oracle (ORCL) Layoff Report

Software giant Oracle ORCL +1.59% ▲ could cut thousands of jobs as it ramps up spending on artificial-intelligence infrastructure, according to a recent report. However, Barclays analyst Raimo Lenschow believes the move should not be viewed as a sign of weak demand. The analyst reiterated an Overweight rating on the stock with a $310 price target, saying Oracle’s growing AI infrastructure opportunity may still be underestimated.

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Recently, Bloomberg reported that Oracle may begin layoffs as soon as this month as the company manages the rising costs of building new AI data centers. The report also said Oracle’s cloud unit has slowed hiring while it reviews open roles.

Barclays Points to AI Spending as Key Factor

Lenschow said the reported layoffs appear to be tied mainly to Oracle’s heavy investments in AI infrastructure rather than slowing demand. The company has been building new data centers to support AI workloads, including projects tied to customers like OpenAI.

At the same time, Oracle’s business mix is gradually changing as its cloud infrastructure segment continues to grow. As that shift continues, the analyst believes many investors may still be underestimating the company’s long-term opportunity in AI computing.

For now, Barclays maintains its bullish view on Oracle, saying the company is well positioned as demand for AI computing continues to expand.

Oracle Set to Report Q3 Results Next Week

Oracle is scheduled to announce its results for the third quarter of Fiscal 2026 on March 10. The Street expects Oracle to report adjusted earnings per share (EPS) of $1.71, reflecting 16.3% year-over-year growth. Also, sales are expected to jump 20% year-over-year to $16.9 billion.

During the earnings call, investors will likely look for updates on Oracle’s AI infrastructure spending and data-center expansion, especially after recent reports that the company may cut jobs as it ramps up investments in

Is ORCL Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on ORCL stock based on 25 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $278.54 per share implies 82.2% upside potential.

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