Oracle selloff on OpenAI report ‘way overreaction,’ says Wedbush

Wedbush analyst Daniel Ives views the selloff in shares of Oracle (ORCL) after the Wall Street Journal reported OpenAI recently missed its own targets for new users and revenue as a “way overreaction.” Wedbush believes OpenAI has been seeing “very high demand” on both the consumer and enterprise front. It “strongly” disagrees with the notion that its growth is weakening. Oracle’s backlog of $553B is largely made up of a $300B cloud contract with OpenAI over the next five years, a project that is set to contribute $30B to revenue, the analyst tells investors in a research note. The firm also has a high level of confidence in Oracle’s ability to complete its $50B capital raise. It believes recent concerns around OpenAI are overblown, saying the company has enough capital to fulfill its compute capacity needs over at least the next three years. Wedbush has an Outperform rating on Oracle with a $225 price target The stock in premarket trading is down 7%, or $11.46, to $161.50.