Why Wall Street Analysts Say the Record Run for Oracle Stock is Just Getting Started

Oracle’s (ORCL) blistering stock gain amid strong AI demand has Wall Street analysts racing to raise their price targets—with most expecting its record run isn’t over yet. 

The shares soared 36% on Wednesday to a record high of about $328, a day after the computing giant reported what Deutsche Bank analysts called “truly awesome results” that “underscored its position as the leader in AI infrastructure.” With Wednesday’s gains, the stock has nearly doubled in value since the start of this year.

“In our near 20 years covering Oracle and for that matter the entire Software industry, there are few quarterly results that match F1Q both in terms of magnitude of revision and clarity of the moment,” the Deutsche Bank analysts said, pointing to Oracle’s $455 billion backlog, which more than quadrupled from a year ago. 

That blowout backlog came as Oracle said it added four multibillion-dollar contracts in its fiscal first quarter, with CEO Safra Catz telling investors that the company expects to gain several more in the next few months. 

One of those customers could be OpenAI, according to the Wall Street Journal, which reported Wednesday that the ChatGPT maker struck a deal to spend a whopping $300 billion for computing power over five years, starting in 2027. Oracle declined to remark and OpenAI did not immediately respond to a request for comment.

Deutsche Bank said that Oracle’s performance yesterday underscored how the strengths of the computing giant’s underlying infrastructure and range of offerings could help it sustain a competitive advantage in the AI era, and boosted their price target for the stock to $335 from $240, a level it could top soon if it can sustain just some of Wednesday’s momentum.

Other analysts were even more bullish, with Jefferies raising its target to $360 from $270. Bank of America boosted its to $368, calling Oracle a “key AI enabler,” while Citi moved its target up to a new Street high of $410.

Citi analysts said they now view Oracle as a “unique megacap AI winner,” after “one of the strongest quarterly contract signings we’ve come across in all of software.” They added they’ll be watching closely for more details from the company next month at its AI event, where the company plans to unveil a new AI service, co-founder and CTO Larry Ellison said.

This article has been updated since it was first published to reflect Oracle declined to comment on a reported deal with OpenAI.