Key insights
- Wedbush reiterates its outperform rating on Oracle, citing strong OpenAI demand and dismissing concerns about weakening growth. They view Oracle as undervalued and a key player in the AI revolution. Oracle's AI positioning and recent developments like SuiteCloud Agent Skills and the Project Jupiter data center contribute to a bullish outlook.
Investing.com - Wedbush reiterated an Outperform rating and $225.00 price target on Oracle (NYSE:ORCL) shares, suggesting significant upside from the current price of $164.36. The stock has declined 38% over the past six months, yet InvestingPro analysis indicates Oracle remains undervalued relative to its Fair Value, placing it among compelling opportunities on the most undervalued stocks list.
The firm said it believes OpenAI has been tracking very high demand on both the consumer and enterprise front. Wedbush said it strongly disagrees with the notion that growth is weakening.
The firm said it would be buyers of AI driven tech stocks and in particular Oracle on what it views as an overreaction to a Wall Street Journal report. Wedbush said recent concerns around OpenAI are overblown.
The firm said the company has enough capital to fulfill its compute capacity needs over at least the next three years following the company’s recent $122 billion funding round. Wedbush said this gives it confidence that Oracle’s backlog will be fulfilled in the near-term.
The firm said the company’s path to IPO will provide sufficient liquidity for its commitments in the long-term. Wedbush said this is a decade long buildout and OpenAI will be at the foundation of the AI Revolution in its view. Oracle’s AI positioning is reflected in its 15% revenue growth, and investors can access 10+ additional InvestingPro Tips for deeper analysis of the company’s prospects.
In other recent news, Oracle has announced the launch of SuiteCloud Agent Skills, which are knowledge packages designed to assist developers in building and deploying NetSuite customizations using AI coding agents and natural language. This development marks Oracle’s NetSuite as the first ERP platform to utilize the agentskills.io open standard. Additionally, Oracle and BorderPlex Digital Assets have revealed that Project Jupiter, an AI data center campus in New Mexico, will be powered by up to 2.45 GW of Bloom Energy fuel cells, a move expected to significantly reduce emissions compared to the previously planned gas turbines.
In the financial sector, Oracle is involved in a $14 billion bond offering for a data center project in Michigan, which is part of a larger agreement with OpenAI to provide substantial computing power. Despite some investor skepticism over AI-related debt, this project is a significant part of Oracle’s strategy. Meanwhile, Wedbush has initiated coverage of Oracle’s stock with an outperform rating and a price target of $225.00, suggesting confidence in Oracle’s potential as a key infrastructure provider for artificial intelligence. These developments highlight Oracle’s continued focus on expanding its capabilities and infrastructure in the AI and data center sectors.
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