Oracle stock price target raised to $370 from $270 at Melius on AI growth

Investing.com - Melius Research raised its price target on Oracle (NYSE:ORCL) to $370.00 from $270.00 on Wednesday, while maintaining a Buy rating on the stock.

The price target increase represents a 37% jump from the firm’s previous valuation, reflecting Melius’s expectation of accelerating long-term revenue growth for Oracle, particularly driven by a surge in AI inferencing capabilities.

Melius expanded its multiple by four turns to account for the higher growth prospects, despite noting that Oracle’s free cash flow has turned negative and "should be hurting for a while" as the company funds its expansion efforts.

The research firm indicated that Oracle’s capital expenditure commentary signals positive trends for other companies with exposure to Oracle and its Stargate technology, specifically mentioning Nvidia, Broadcom, AMD, and Arista Networks.

Melius also suggested that broader AI cloud trends should benefit Microsoft, Google, and CoreWeave, though the firm maintains Buy ratings only on Microsoft and the previously mentioned hardware companies.

In other recent news, Alphabet has been fined €2.95 billion by the European Commission for alleged anticompetitive practices in its digital advertising business. The Commission concluded that Google, a subsidiary of Alphabet, abused its market dominance by favoring its own ad exchange and publisher ad server, requiring the company to cease these practices and submit a compliance plan by November 4. Alphabet plans to appeal the decision and will record the fine as an accrual in its financial statements for the third quarter of 2025. Additionally, Evercore ISI has raised its price target for Alphabet stock to $300, citing the company’s continued strength in commercial-intent search use cases. Tigress Financial Partners also increased its price target to $280, highlighting Alphabet’s growth in AI and a recent favorable regulatory decision regarding Chrome. Meanwhile, Cantor Fitzgerald maintains a Neutral rating on the stock amidst these developments. These updates reflect a mix of regulatory challenges and positive analyst outlooks for Alphabet.

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