Oracle Corporation's stock climbed 8.2% to $154.53 during Monday's trading session, fueled by a bullish upgrade from DA Davidson. The firm raised its rating on Oracle to "buy" from "neutral," maintaining a $180 price target. Analyst Gil Luria suggested the market had overcorrected to the downside, particularly regarding shifting sentiment around Oracle's relationship with OpenAI.
Diverging Analyst Views on Cloud Strategy
This optimistic call stood in direct contrast to a more cautious stance from Melius Research, which downgraded Oracle to "hold" from "buy" and set a $160 target. Melius analyst Ben Reitzes expressed concerns over cash generation and competitive risks, noting uncertainty around whether OpenAI will outperform rivals like Anthropic and Google. He also highlighted potential dilution from new stock issuances and debt.
The opposing views arrive as Oracle's stock had plummeted nearly 50% between late October and early February, mirroring a broader sell-off in software stocks. Anxiety has mounted that rapid advances in artificial intelligence could disrupt traditional software business models.
Scrutiny on Capital Plans and Upcoming Earnings
Investor focus is now intensely fixed on Oracle's ambitious cloud infrastructure expansion. The company recently outlined plans to raise $45 to $50 billion in 2026 to fund growth, with roughly half expected to come from debt and the remainder from equity, including a potential $20 billion at-the-market offering.
Other enterprise software giants also saw gains, with Microsoft rising 2.1% and SAP's U.S. shares advancing approximately 2.3%. Meanwhile, Bernstein SocGen maintained an "Outperform" rating on Oracle, albeit with a reduced price target, calling the stock "a solid entry point."
Traders are awaiting Oracle's fiscal third-quarter results, scheduled for mid-March, for further clarity on its financial trajectory and the execution of its cloud investment strategy.
