Oracle stock climbed again on Wednesday, building on a modest gain from the previous session after a bullish note from Wells Fargo revived optimism around the enterprise software giant.
The stock rose roughly 2% to trade at $204.98, offering investors relief after a bruising November in which shares tumbled 23.1%, wiping out the rally triggered by the company’s blockbuster September earnings.
The volatility has revolved around Oracle’s shock disclosure in September that its total remaining order backlog had surged to $455 billion, driven largely by a reported $300 billion cloud computing partnership with OpenAI.
While the market initially cheered what appeared to be a massive long-term revenue pipeline, subsequent scrutiny over the durability of those commitments, Oracle’s increased debt load, and broader weakness in the AI trade dragged the shares sharply lower.
Wells Fargo’s initiation of coverage appears to have shifted sentiment.
In a note released Wednesday, the bank assigned an Overweight rating and a $280 price target, arguing that Oracle is positioned to emerge as the leader of an artificial intelligence “super-cycle.”
The target indicates an around 40% upside from the Oracle stock’s current market price.
Wells Fargo bullish on Oracle stock
Analyst Michael Turrin wrote that the company is “still early” in an AI-driven reacceleration that leaves “room to run,” even after the stock has fallen “42% off highs” and now trades at about 25 times FY27 earnings.
The bank highlighted Oracle’s bookings of nearly $500 billion tied to AI workloads, calling the company in the “pole position” with customers including OpenAI, xAI, Meta Platforms and TikTok.
Wells Fargo projects that Oracle Cloud Infrastructure will scale significantly over the coming four years, estimating OCI’s market share could rise to “~16% of the cloud market by 2029,” up from approximately 5% in 2025.
A major driver of this expansion is the multi-year OpenAI compute contract, estimated at 4.5GW and exceeding $300 billion.
Turrin also pointed to an additional “$75B commits from various AI Labs,” saying these agreements, along with OpenAI’s long-term ambitions, represent meaningful upside.
The Wall Street Journal has previously reported that OpenAI agreed to purchase $300 billion worth of computing capacity from Oracle over five years to support its AI systems, including ChatGPT.
Deutsche Bank analyst Brad Zelnick expressed a similar view days earlier, maintaining a Buy rating and a $375 price target.
Zelnick told investors that even the bear case “looks bullish,” emphasising that Oracle’s earnings and revenue growth remain strong even when excluding the OpenAI contribution.
He described the company’s massive AI-linked backlog as a “solid ROI business” that reinforces Oracle’s leadership in large-scale AI cloud infrastructure.
“While we appreciate the financial and operational risks, our view is that these are much more than offset by the very real opportunity,” he wrote, adding that the stock’s steep pullback offers an “attractive entry point.”
Despite the optimism, Oracle’s shares remain sharply lower since the OpenAI deal was reported on September 10, falling nearly 39% over that period as investors questioned the sustainability of the AI-driven surge.
The post Why this top analyst sees Oracle stock climbing around 40% appeared first on Invezz
