Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com -- Wells Fargo initiated coverage of Oracle with an Overweight rating and a $280 price target in a note on Wednesday, arguing that the company is emerging as a leader in the AI infrastructure boom.
The bank’s analyst Michael Turrin stated that Oracle is “still early” in an AI-led reacceleration that presents “room to run,” even as shares sit “42% off highs” and trade at roughly 25x FY27 earnings.
According to Wells Fargo, Oracle is positioned to become a “clear market share gainer in infra,” backed by nearly “half a trillion in AI deals already booked” and its “pole position w/ key accts (OpenAI, xAI, Meta, TikTok).”
The analyst highlights that Oracle Cloud Infrastructure (OCI) is set to scale significantly over the next four years, estimating its share of the cloud market will rise to “~16% of the cloud market by 2029,” up from about 5% in 2025.
A major factor behind that growth is OpenAI’s massive 4.5GW, $300 billion-plus compute contract.
Turrin writes that he expects OCI numbers to continue to climb, adding that there is further upside from existing “$75B commits from various AI Labs” as well as from OpenAI’s long-term ambition.
The analyst notes OpenAI only stands at 8GW of its Stargate capacity, far short of its stated target of “250GW capacity by 2033.”
Wells Fargo also points to benefits for Oracle’s higher-margin software division, saying the company “remains the outright leader in data” and is poised to see a “flywheel of adoption toward app layer” as AI services scale.
Wells Fargo argues Oracle’s valuation is reasonable given the “magnitude of AI opp ahead” and the company’s strengthening position in large-scale AI infrastructure.