In recent months, U.S. software and cloud stocks have declined amidst shifting investor sentiment. Oracle (ORCL) has experienced a staggering drop of nearly 50% since late October, driven by concerns over cloud spending and OpenAI funding. However, a recent upgrade from D.A. Davidson, which cited optimism for a “revamped OpenAI,” led to a 10% surge in Oracle’s stock. This potential resurgence in demand for Oracle’s cloud services, linked to a massive $300 billion contract with OpenAI, positions the company favorably in AI infrastructure. Despite facing challenges, Oracle’s revenue grew 14% year-over-year to $16.06 billion, with cloud services generating substantial gains. Analysts hold a “Moderate Buy” consensus rating for Oracle, with a significant upside potential of over 80%, emphasizing its extensive backlog of contracts and strategic investments in AI data centers as key growth drivers. Concerns about debt and spending persist, yet Oracle’s long-term prospects remain strong.
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