Oracle stock edged higher Tuesday with the database technology giant's share hovering near record highs. Analysts with BofA Securities upped this price target for Oracle in response to a strong early earnings cycle for AI stocks.
BofA Securities analyst Brad Sills in a client note Tuesday gave Oracle a price target of 295, up from 220, citing "positive AI infrastructure sentiment." Tech giants Microsoft and Meta Platforms each gave capital expenditures outlooks above Wall Street estimates last week. Amazon also said it would up spending to build data centers.
"We view these as demand signals into a large addressable market for AI infrastructure," Sills wrote. The spending cycle is "likely to benefit Oracle's OCI platform," Sills added.
However, Sills reiterated a neutral call on the stock, citing a "lack of clarity on the AI infrastructure debate" for Oracle.
Oracle is battling to establish its Oracle Cloud Infrastructure business as a serious competitor to Amazon and Microsoft. OCI is faster-growing but significantly smaller than Amazon Web Services and Microsoft Azure. Oracle got a big boost last month when it announced it will develop 4.5 gigawatts of data center capacity for ChatGPT creator OpenAI.
Still, questions remain about how much it will cost Oracle to build up capacity to meet that demand, as well as the sustainability of AI-related computing demand.
"The bull/bear debate on the stock centers on how material the AI infrastructure opportunity is for Oracle and the magnitude of upside to topline growth targets," Sills wrote. "At this point, there is little visibility on these fundamentals given the nascent stage of the AI infrastructure build."
Oracle Stock: Up 54% This Year
On the stock market today, Oracle stock is up a fraction at 252.79 in morning trades.
Oracle stock has rallied 54% year-to-date, helped by enthusiasm about its potential to be an AI winner. Last year, Oracle surged 60% to post the company's best share price-growth performance since 1999.
After a rough start to the year, Oracle stock soared back to record highs with a 17% rally in July and 32% surge in June. A strong fiscal Q4 earnings report posted in early June helped bolster Wall Street's confidence Oracle will benefit from AI cloud demand. Oracle told investors last month that it expects cloud infrastructure revenue to grow 70% during fiscal 2026. Oracle's total cloud infrastructure revenue for its 2025 fiscal year was $10.3 billion.
Oracle broke out on June 12 from a long consolidation pattern with a buy point at 198.31. The stock is extended well beyond a 5% buy zone above that level, according to IBD MarketSurge.
