Oracle Corporation

New York Stock Exchange
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Bullish +65

Ignore the OpenAI Panic and Keep Buying Oracle Stock, Says Wedbush - Barchart

📉 ORCL stock dropped more than 4% on April 28 after OpenAI missed internal user and revenue targets, triggering fears that Oracle's AI bet might be cooling.

💰 Wedbush analyst Dan Ives initiated coverage with an 'Outperform' rating and a $225 price target, urging investors to treat the recent decline as a buying opportunity.

📈 Oracle reported Q3 revenue of $17.19 billion, a 22% year-over-year increase, beating market estimates and accelerating cloud business growth.

☁️ Cloud services and license revenue climbed 44% to $8.9 billion, while OCI revenue surged 84% to $4.9 billion in the latest quarter.

🤝 Oracle has a massive backlog of contracts totaling $553 billion, representing a 325% year-over-year increase driven by large AI-related agreements.

🏗️ The company is executing a major data-center buildout and plans to raise approximately $45-50 billion in capital this year via debt and equity issuance.

🔗 Oracle announced a partnership with AWS to create a private, high-speed link between its cloud and Amazon's cloud infrastructure.

💻 The firm signed a deal to use AMD's new MI450 AI chips in its servers, deploying 50,000 units by late 2026.

📊 Wall Street consensus sentiment is cautiously positive, with an average price target of $247.43 implying roughly 39% upside from current levels.

⚖️ Analyst views remain mixed; while Barclays raised its target to $240, Morgan Stanley maintained an 'Equal-Weight' rating citing uncertainty around new GPU-as-a-Service margins.

Bullish Signals
  • Wedbush analyst Dan Ives explicitly calls the recent stock decline an 'overreaction' and a buying opportunity due to underlying business strength.
  • Oracle's Q3 revenue grew 22% year-over-year to $17.19 billion, significantly beating market expectations.
  • Cloud services and license revenue accelerated with a 44% increase to $8.9 billion, demonstrating strong demand for cloud infrastructure.
  • OCI revenue jumped 84% to $4.9 billion, highlighting the rapid expansion of Oracle's cloud operations.
  • The company's remaining performance obligations rose 325% year-over-year to a massive $553 billion, indicating locked-in future revenue.
  • Oracle raised its fiscal 2027 revenue target to $90 billion, signaling confidence in long-term growth trajectory.
  • Strategic multicloud partnerships with AWS, Microsoft Azure, and Google Cloud are expanding Oracle's market reach and customer base.
  • The company secured a deal to deploy 50,000 AMD MI450 AI chips by late 2026, strengthening its hardware capabilities.
Risk Factors
  • ORCL stock has cooled off significantly from its all-time highs near $346, trading around $172 and down roughly 50% from the peak.
  • Investors are concerned about Oracle's heavy spending on a $50 billion data-center buildout and associated debt levels.
  • Weaker smartphone demand has negatively impacted revenue in Oracle's legacy hardware business.
  • Oracle is trading at a premium valuation with a forward P/E of 26.5x, compared to tech averages of roughly 4x.
  • Some bondholders have sued the company, fearing dilution and increased debt from its capital raising plans.
Full Analysis
Wedbush analyst Dan Ives advises investors to ignore recent panic surrounding Oracle (ORCL) stock, which fell over 4% following reports that OpenAI missed internal targets. Ives characterizes the selloff as an overreaction, arguing that demand for AI capacity remains sky-high and that Oracle's massive backlog of contracts, including a $300 billion compute deal with OpenAI, provides a strong safety net against short-term volatility. Oracle recently reported robust third-quarter results that beat market expectations, with revenue rising 22% year-over-year to $17.19 billion. Cloud services and license revenue surged 44% to $8.9 billion, driven by infrastructure demand, while OCI revenue jumped 84%. The company posted net income of $3.7 billion and adjusted EPS of $1.79, significantly outperforming analyst estimates despite heavy capital expenditures on data center expansion. Looking ahead, Oracle expects Q4 revenue growth between 19% and 21%, with full-year 2026 revenue forecast at approximately $67 billion and a raised fiscal 2027 target of $90 billion. The company is raising roughly $45-50 billion in capital via debt and equity to fund its cloud expansion, while also signing strategic partnerships with AWS, Microsoft Azure, and Google Cloud to enhance multicloud capabilities.