11:32 AM EDT, 06/05/2026 (MT Newswires) -- Oracle (ORCL) faces a critical test of whether it has overcome its capacity constraints as it continues to expand artificial intelligence infrastructure, RBC Capital Markets said in a note emailed Friday.

The company has consistently pointed to supply as a constraint for cloud infrastructure growth, RBC analyst Rishi Jaluria wrote. That means the focus in the upcoming results will be on megawatt additions, new campus announcements and the pace of graphics processing unit cluster deployments.

"A central question for (the fiscal fourth quarter) is whether Oracle can demonstrate that data center capacity is coming online fast enough to meet the demand pipeline it has been signaling," Jaluria said.

The cloud computing company's remaining performance obligations exceeded $550 billion in the third quarter, reflecting a clear demand signal, he said.

"Any deceleration, or color suggesting that deal activity slowed due to capacity constraints rather than demand softness, will be a key differentiator for how the market interprets the print," Jaluria said.

Oracle is scheduled to release its quarterly results Wednesday. "We maintain a cautious stance heading into the print," according to Jaluria.

RBC raised its price target on Oracle's shares to $190 from $160, citing "peer multiple expansion," while maintaining its sector perform rating.

Shares of Oracle were down 6.7% intraday Friday, but have gained 13% year to date.

Price: 219.54, Change: -16.80, Percent Change: -7.11