Oracle, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Derrick Wood from TD Cowen reiterated a Buy rating on the stock and has a $400.00 price target.
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Derrick Wood has given his Buy rating due to a combination of factors, including Oracle’s impressive growth forecasts and strategic positioning in the AI sector. Oracle’s recent Analyst Day highlighted significant revenue and earnings per share (EPS) targets for fiscal year 2030, which are notably above market expectations. The company has raised its revenue target for Oracle Cloud Infrastructure (OCI) to $166 billion, suggesting a robust compound annual growth rate (CAGR) of 75%, and expects EPS to grow at a 28% CAGR to $21, surpassing previous estimates.
Furthermore, Oracle’s AI business is projected to achieve gross margins between 30-40%, which is higher than anticipated, alleviating investor concerns. The company’s shift towards a platform-based go-to-market strategy is expected to enhance customer engagement across its four key pillars: Fusion Applications, Data Platform, OCI, and AI. This strategic realignment, coupled with Oracle’s collaboration with OpenAI, is likely to drive increased adoption and spending on Oracle’s comprehensive suite of solutions, reinforcing the Buy rating.
In another report released today, Barclays also maintained a Buy rating on the stock with a $400.00 price target.