Analyst Derrick Wood of TD Cowen reiterated a Buy rating on Oracle, boosting the price target to $325.00.
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Derrick Wood has given his Buy rating due to a combination of factors surrounding Oracle’s strategic partnership with OpenAI. The collaboration is set to significantly expand Oracle’s datacenter capacity, increasing its potential for substantial revenue growth. This partnership is expected to enhance Oracle’s infrastructure capabilities, with projections indicating a significant increase in datacenter capacity, which could lead to over $50 billion in annual revenue at full production.
Moreover, the anticipated gross margins from this expansion are projected to exceed 40% once fully operational, despite initial ramp-up costs. These financial projections, alongside Oracle’s strategic positioning in the AI infrastructure space, underpin Wood’s confidence in Oracle’s future performance, justifying the Buy rating. The potential for Oracle to exceed its previous revenue commitments further supports this optimistic outlook.
Wood covers the Technology sector, focusing on stocks such as Oracle, Klaviyo, Inc. Class A, and Microsoft. According to TipRanks, Wood has an average return of 12.0% and a 54.73% success rate on recommended stocks.