TD Cowen analyst Derrick Wood raised his price target on Oracle (ORCL) stock to a street-high $275 (17.7% upside), up from $250, while reiterating a Buy rating. The bullish move follows a Bloomberg report that said Oracle has entered a deal with OpenAI via Stargate, the startup’s funding vehicle. The five-star analyst believes the agreement could boost Oracle’s revenue over the next few years.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
ORCL stock has been climbing since Monday and hit a record high of $234.93 on Wednesday after news of the deal. It also opened 1.1% higher on Thursday, reflecting investors’ continued optimism over the deal.
Analyst Sees over $150B Revenues for ORCL
Wood highlighted the large scale of the deal. The agreement is expected to include 4.5GW of new data center capacity, potentially driving $30 billion in entirely new annual revenue by FY28, not tied to contract renewals. The analyst noted this could lead to over 50% revenue growth in that year.
He also sees the contract’s total value hitting $150 billion to $200 billion, and driving Oracle’s revenue to over $150 billion in FY29, much above the company’s earlier forecast of $104 billion.
Further, EPS could rise to $15, implying a mid to high 20% compound annual growth rate (CAGR) from FY25 to FY29.
Wood added, “We believe there is a lot of blue sky upside to estimates, which we think will continue to draw more investor demand.”
Is ORCL Stock a Buy?
Overall, ORCL stock has a Moderate Buy consensus rating based on 21 Buys and 11 Holds assigned in the last three months. The average Oracle stock price target of $219.19 implies about 5.74% downside from current levels.
Perhaps analysts are yet to adjust their price targets post-ORCL’s recent surge.
