TLDR
- Oppenheimer initiated coverage on Oracle (ORCL) with an Outperform rating and $185 price objective Wednesday
- Shares have plummeted from September’s peak of $328.33 to approximately $149, slashing the valuation multiple by over 50%
- Brian Schwartz, the lead analyst, identifies compelling risk/reward dynamics with earnings per share potentially doubling or tripling by FY2030
- OpenAI’s expansion to 800M+ weekly active users and prospective $100B capital raise are alleviating customer risk worries
- The company intends to secure $45Bā$50B through debt markets to support roughly $330B in capital spending by fiscal 2030
Oracle (ORCL) received an endorsement from Wall Street analysts Wednesday. The firm Oppenheimer elevated its rating to Outperform from Perform, establishing a $185 price objective.
Brian Schwartz, the analyst behind the upgrade, contends that the share price has declined sufficiently to present an appealing opportunity.
ORCL shares rallied approximately 4% during trading following the announcement, reaching roughly $149.45 in premarket activity. However, this remains substantially below its historical peak.
The database giant reached $328.33 on September 10, 2025. That rally followed Oracle’s disclosure of a $300 billion increase in deferred revenue tied to long-term customer agreements, with significant exposure to OpenAI.
From that point forward, shares entered a sustained decline. Contributing factors included broader technology sector weakness, anxieties surrounding Oracle’s capital requirements, and uncertainty about OpenAI’s financial viability.
The valuation compression has been dramatic. ORCL currently commands roughly 19 times forward earnings estimates, plummeting from north of 40 times during September.
“Multiples can always go lower,” Schwartz acknowledged. However, he maintained that the dramatic selloff “limits the magnitude of the downside at current levels.”
OpenAI Risk Easing
A significant component of the bearish thesis centered on Oracle’s heavy reliance on OpenAI as a critical customer. That apprehension appears to be dissipating.
OpenAI’s weekly active user base has surged past 800 million as of early February. The artificial intelligence company is reportedly assembling its inaugural enterprise sales organization and securing commercial agreements.
OpenAI is purportedly nearing completion of a $100 billion capital raise. This development strengthens confidence in the company’s ability to honor its contractual commitments to Oracle.
Oppenheimer additionally referenced TikTok as another significant customer win that helps diversify counterparty exposure.
Financing Progress
Oracle’s second major challenge involves funding its aggressive expansion plans. Oppenheimer projects the company requires approximately $330 billion in capital investments through fiscal 2030.
Oracle addressed a portion of this requirement earlier in the month by unveiling plans to issue between $45 billion and $50 billion in corporate bonds.
This financing initiative directly enables Oracle Cloud Infrastructure expansion, according to Schwartz and colleagues.
Even assuming management’s revenue projections are reduced by 25% in their conservative scenario, Oppenheimer’s models indicate EPS more than doubling by fiscal 2030. Under their optimistic scenarioāincorporating just a 10% revenue adjustmentāEPS approaches triple current levels.
Schwartz characterized Oracle as among the strongest EPS growth compounders in the large-cap universe through decade’s end.
The rating change represents a “contrarian bet.” Despite the steep selloff, Oracle remains significantly underrepresented in institutional portfolios, the analysts observed.
Nevertheless, broader analyst sentiment skews positive. Among 45 analysts monitored by FactSet, 78% assign Buy-equivalent ratingsāan increase from 67% during September’s peak.
D.A. Davidson executed a comparable upgrade two weeks earlier, raising Oracle to Buy from Hold with a $180 target price.
Schwartz acknowledged candidly that the call “may prove early,” describing ORCL as a “show me stock” requiring consistent operational execution to convince skeptical market participants.
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