Oracle, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Keith Weiss from Morgan Stanley maintained a Hold rating on the stock and has a $320.00 price target.
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Keith Weiss has given his Hold rating due to a combination of factors influencing Oracle’s financial outlook. The company is experiencing a significant transformation in its business model, primarily driven by its Oracle Cloud Infrastructure (OCI) segment. Oracle’s ambitious revenue targets for OCI, particularly in the AI sector, suggest a substantial increase in revenue by FY30. However, despite these promising growth prospects, much of this potential is already reflected in the current share price, which limits the immediate upside potential for investors.
Moreover, while Oracle’s strategic partnerships and large-scale contracts, such as those with OpenAI, are expected to drive significant revenue growth, there are inherent risks and changes in margin structures associated with this shift. The anticipated erosion of operating margins, despite the expected revenue growth, contributes to the decision to maintain a Hold rating. This cautious stance reflects the balance between Oracle’s growth opportunities and the challenges it faces in executing its ambitious plans.
In another report released on September 15, Berenberg Bank also maintained a Hold rating on the stock with a $306.00 price target.