Oracle Corporation shares advanced 3.4% to $161.92 during Tuesday's trading, building on a significant 9.6% gain from the previous session. The two-day surge follows a bullish analyst call that renewed investor focus on the company's artificial intelligence infrastructure investments.
Analyst Upgrade Fuels Optimism
D.A. Davidson analyst Gil Luria raised his rating on Oracle to "buy" and established a $180 price target. In his research note, Luria pointed to several catalysts, including what he described as "pure upside" from Oracle Cloud Infrastructure's potential to capture demand linked to OpenAI. He also cited Oracle's 15% stake in a U.S. TikTok joint venture, which he estimates could contribute approximately $1 billion in annual revenue to the cloud unit.
The analyst acknowledged Oracle's substantial debt, which stands near $130 billion, and the company's plans to raise up to $50 billion in 2026 to fund its expansion. However, Luria argued that the recent selloff had "overshot" and that the stock presented compelling value given its AI positioning.
Product Rollouts and Financial Concerns
Separately, Oracle announced the launch of new AI-powered agents within its Fusion Cloud Applications suite, designed to automate marketing, sales, and service workflows. This continues a pattern of product releases aimed at embedding AI capabilities across its software portfolio.
Despite the positive momentum, some analysts remain cautious. Melius Research downgraded Oracle to "hold" on Monday, maintaining a $160 target. The firm expressed concerns about cash generation, noting that value might be "absorbed by debt and new stock issuances for a while." The debate highlights the central challenge for Oracle and other tech giants: balancing massive capital expenditures on AI data centers with investor expectations for financial returns.
Traders are now looking ahead to key U.S. economic data, including the January nonfarm payrolls and Consumer Price Index reports, which could influence interest rate expectations and valuations across the technology sector.
