TLDR
- Oracle announces $3 billion investment over five years in AI and cloud infrastructure across Germany and Netherlands
- Evercore ISI raises price target to $270 from $215, maintaining Outperform rating on strong AI momentum
- Multiple analyst upgrades including Piper Sandler and TD Cowen with targets reaching $275
- Company highlights $30 billion annual contract that positions Oracle as fourth global hyperscaler
- Oracle stock has surged 38% year-to-date and 60.93% over past year, trading near 52-week highs
Oracle just dropped some serious cash on European expansion. The database giant plans to spend $3 billion over the next five years building AI and cloud infrastructure in Germany and the Netherlands.
The investment splits $2 billion for Germany and $1 billion for the Netherlands. Oracle says this expansion will help meet growing demand for AI services across Europe.
This move comes as tech companies pour billions into AI infrastructure following ChatGPT’s success. Oracle’s cloud services help other companies build their own AI systems.
The timing couldn’t be better for Oracle’s stock price. Shares have climbed 38% so far this year as investors bet big on AI growth.
Wall Street analysts are taking notice too. Evercore ISI just bumped their price target to $270 from $215 while keeping their Outperform rating.
Analyst Optimism Drives Stock Higher
The Evercore team broke down Oracle’s cloud business into three parts. They see core cloud infrastructure growing 49% annually through 2029. Database services should grow 37% while AI services could explode 104% each year.
Those growth rates come with trade-offs though. AI services carry lower profit margins at around 30% compared to 65% for core cloud and 75% for database services.
Still, Evercore expects Oracle’s operating income to grow 13% annually through 2029. Earnings per share should climb 11% each year in their base case.
Other analysts are equally bullish. Piper Sandler upgraded Oracle to Overweight with a $270 target. TD Cowen went even higher at $275.
The upgrade spree stems from Oracle’s recent filing about a massive $30 billion annual contract. This deal positions Oracle as the fourth major cloud provider alongside Amazon, Microsoft, and Google.
Revenue Growth Accelerates
Oracle raised its annual revenue forecast in June thanks to strong AI demand. The company now expects continued growth as businesses rush to adopt AI technologies.
Current annual revenue sits at $57.4 billion with a market value of $647.6 billion. The stock trades near its 52-week high of $241.44.
Oracle is also part of Stargate, a joint venture designed to provide computing power to OpenAI. This partnership could drive additional revenue growth.
The company recently settled a legal dispute with Rimini Street. Oracle will return $37.8 million to Rimini Street, ending years of litigation.
Multiple analyst firms have raised price targets in recent weeks. Bernstein lifted their target to $269 while highlighting the multi-year contract worth over $30 billion by fiscal 2028.
The European expansion announcement shows Oracle’s commitment to global AI infrastructure. The company sees strong demand across international markets.
Oracle’s stock has gained 60.93% over the past year as AI investments pay off. The shares continue trading near all-time highs.
The $3 billion European investment will roll out over five years starting immediately. Oracle expects this expansion to support growing enterprise AI adoption across Germany and the Netherlands.
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