TLDR
- Oracle stock dropped over 30% since its September peak, falling in 14 of the past 19 trading sessions despite a 36% surge on Sept. 10
- The September jump came after Oracle revealed its backlog of contracted work tripled to $455 billion, showing strong AI server demand
- Mizuho Securities maintains a $400 price target, suggesting 75% upside, while most Wall Street analysts rate the stock a Buy
- Concerns about margins, financing arrangements, and capital spending plans have weighed on the stock recently
- Oracle’s December quarterly results will be crucial to prove it can convert AI demand into profit
Oracle shares continue their downward slide. The stock fell nearly 4% on Wednesday and has now dropped more than 30% from its September peak.
But Wall Street analysts say the selloff looks overdone. Mizuho Securities analyst Siti Panigrahi reiterated a Buy rating with a $400 price target.
That implies more than 75% upside from Wednesday’s closing price of $226.92.
The stock’s trouble comes just two months after a massive rally. Shares surged 36% on Sept. 10 when Oracle reported its backlog of contracted work had tripled.
The figure jumped to $455 billion in the fiscal first quarter. This showed strong demand for renting AI servers in the cloud.
Since that peak, the stock has fallen in 14 of the past 19 trading sessions. Worries about weaker margins and complex financing deals have spooked investors.
CoreWeave Results Support Bull Case
Recent earnings from rival CoreWeave provided fresh insight into the AI infrastructure market. The company’s quarterly report showed continued strong demand for AI computing.
CoreWeave warned of a data-center delay due to supply-chain problems. This news dragged Oracle down 1.9% on Tuesday.
But Mizuho found positive signals in the report. CoreWeave emphasized that its GPU clusters can be reallocated to meet different customer needs.
This flexibility matters for Oracle’s business model. “High-density GPU capacity can be flexibly repurposed as workloads evolve,” Panigrahi wrote.
Oracle has told investors its own buildout in Abilene, Texas, remains on schedule. This should help the company avoid similar delays.
The AI backlog remains the core of the bull case. Oracle’s contracts with hyperscalers and enterprise clients continue to grow.
These deals should convert into infrastructure and recurring revenue over time. The question is execution.
Wall Street Remains Mostly Bullish
Most analysts still rate Oracle a Buy. Of 46 firms polled by FactSet, 32 rate the stock Buy or equivalent.
Only two analysts rate it a Sell. The average price target sits at $354.13, implying 56% upside.
Phillip Securities Research maintains a Buy rating with a $350 target. But the firm noted challenges ahead.
“Visibility remains limited regarding the future CAPEX trajectory and financing strategy,” analysts wrote last month. The company needs to provide clearer details on capital spending plans.
Faster execution of multi-billion-dollar AI deals will be key. Investors want proof that Oracle can turn AI demand into profit.
The December quarterly results will be a major test. Panigrahi believes Oracle is “well positioned to exceed expectations.”
Of the 37 analysts tracked by TipRanks, 25 rate Oracle a Buy. Eleven rate it a Hold and just one recommends a Sell.
This gives Oracle a “Moderate Buy” consensus. The stock trades at current levels that many analysts view as attractive given the AI growth story.
The company’s ability to meet AI demand while maintaining margins will determine if the recent selloff was justified or an overreaction.
The post Oracle (ORCL) Stock: Top Analyst See 75% Upside Despite Recent 30% Plunge appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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