Oppenheimer Upgrades Oracle to Buy, Sets $185 Target

Oppenheimer Sets $185 Price Target in Upgrade

Oppenheimer & Co. upgraded Oracle (ORCL) stock to Outperform from Perform on Wednesday, establishing a $185 price target. The firm stated that the stock's valuation has become "too cheap to ignore" following a sustained decline since September. The analyst action prompted a 2.3% increase in Oracle's premarket share price to $149.45. Oppenheimer's Brian Schwartz noted that the selloff since September limits further downside and presents an attractive risk/reward profile for investors.

Valuation Halves as AI Expansion Risks Subside

Oracle's stock has spiraled since hitting a record high of $328.33 on September 10, a decline driven by investor concerns about its ability to finance a capital-intensive AI expansion and its heavy reliance on a single client, OpenAI. This correction caused its forward earnings multiple to collapse from over 40 times in September to approximately 19 times. However, Oppenheimer believes these risks are now clearing. OpenAI's user base re-accelerated to over 800 million weekly users in early February, strengthening its ability to meet its obligations to Oracle. In addition, Oracle is making progress on its own financing, announcing plans for a $45 billion to $50 billion bond issuance to help fund its estimated $330 billion in capital expenditures through fiscal 2030.

Analysts Project 20% EPS Growth Through 2030

Looking ahead, Oppenheimer projects Oracle is positioned to become one of the largest earnings-per-share growth compounders among large-cap technology companies. The firm's model, which revises Oracle's own guidance downward, still forecasts 20% annual growth in earnings per share from fiscal 2027 to 2030. Oppenheimer's upgrade follows a similar move by D.A. Davidson two weeks prior, which also cited positive developments at OpenAI. The bullish sentiment is widening on Wall Street, where 78% of the 45 analysts polled by FactSet now rate Oracle stock the equivalent of a Buy, an increase from 67% at its September peak.