Oracle (ORCL) gained over 4% on Wednesday after Top analysts at Deutsche Bank and HSBC reiterated Buy ratings on the stock. They cited confidence in the company’s long-term growth strategy and ability to manage infrastructure investments amid surging AI demand.
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It must be noted that ORCL stock has declined 15% over the past three months due to investor concerns about the AI bubble, uncertainty related to its heavy capital commitments, and worries tied to its partnership with OpenAI (PC:OPAIQ).
HSBC Highlights Funding Flexibility
HSBC analyst Stephen Bersey reaffirmed a Buy rating with a $382 price target, pointing to the company’s careful approach to expanding its data centers. He added that Oracle can ease balance sheet pressure by using options, including joint ventures or special purpose vehicles.
The five-star analyst highlighted Oracle’s strong position, with over $500 billion in contracted remaining performance obligations (RPO), providing visibility into future revenues.
He added that Oracle has spent more than a decade studying the data center model and is now executing impressively against key players such as Amazon’s (AMZN) AWS and Microsoft’s (MSFT) Azure.
“We believe the company is committed to maintaining its investment grade rating and will consider all funding options, with an eye on mitigating/reallocating risk and potentially using JVs,” Bersey said.
Deutsche Bank Sees Undervalued AI Exposure
Deutsche Bank analyst Brad Zelnick also reiterated a Buy rating, with a $375 price target. Zelnick addressed Oracle’s recent stock swings and concerns about the AI sector’s ability to meet capacity commitments, particularly in relation to OpenAI.
Using Oracle’s long-term guidance and his own forecast framework, Zelnick estimated FY30 financials excluding OpenAI-related revenues and expenses.
In that scenario, he projected EPS of $17 (down $4 from guidance) and free cash flow of $31 billion (down $10 billion). Discounting those figures back to the present, the analyst argued Oracle’s current share price of around $200 reflects little credit for its OpenAI partnership.
While he acknowledged concerns about Oracle’s long-lived lease obligations, Zelnick suggested that flexibility exists.
Is Oracle a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 26 Buys, eight Holds, and one Sell assigned in the past three months. Further, the average Oracle price target of $346.63 per share implies 10.74% upside potential.
