Oracle stock rating reiterated at Outperform by Bernstein SocGen

Investing.com - Bernstein SocGen Group has reiterated an Outperform rating on Oracle (NYSE:ORCL) with a price target of $364.00, according to a research note released Friday. The target represents potential upside from the current price of $296.96, though InvestingPro data suggests the stock is trading above its Fair Value. The stock has shown remarkable momentum, gaining over 123% in the past six months.

The firm views Oracle as undergoing its third major business model transition, following earlier shifts of its ERP and database offerings to the cloud, and the growth of Oracle Cloud Infrastructure (OCI) driven by its datacenter architecture. This transformation has contributed to Oracle’s solid 9.67% revenue growth over the last twelve months, with the company generating $59.02 billion in revenue.

Bernstein SocGen believes Oracle is positioning itself to become the largest AI training vendor, which could establish the company as the third-largest hyperscaler by revenue and the leading AI training Infrastructure-as-a-Service provider.

The research firm acknowledges concerns about Oracle’s strategy but considers them "overblown," noting that while AI training is a lower-margin business, it should remain profitable and help Oracle compete in new markets.

Bernstein SocGen expects Oracle’s upcoming Financial Analyst Meeting to provide additional details that could address investor concerns about the company’s AI strategy and business model transition.

In other recent news, Oracle has been in the spotlight with several key developments. Citi has raised its price target for Oracle to $415, maintaining a Buy rating, and highlighting the recent stock pullback as a buying opportunity. Meanwhile, TD Cowen has reiterated its Buy rating and a $375 price target, expressing optimism about Oracle’s upcoming AI World event. On the cybersecurity front, Google reported a significant hacking campaign targeting Oracle’s business software products, affecting dozens of companies and resulting in the theft of substantial customer data. In a positive development, Oracle announced the launch of its Health Connection Hub, a platform designed to streamline data sharing for U.S. healthcare providers, reportedly reducing processing times for certain claims by 50 percent. Additionally, Phillip Securities initiated coverage on Oracle with a Buy rating and a $350 price target, citing a significant increase in Oracle’s remaining performance obligations backlog. This backlog growth is linked to major deals, including multicloud partnerships and AI projects. These recent developments provide a multifaceted view of Oracle’s current business landscape.

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