Overview
- Wedbush’s Dan Ives began coverage with an Outperform rating and a $225 price target, arguing Oracle’s heavy data-center spend is backed by signed AI infrastructure contracts rather than a speculative bet.
- Investors have sold the stock hard in 2026 as capital spending swelled to roughly $50 billion and free cash flow swung deeply negative, including about negative $13.2 billion in fiscal Q3.
- Oracle reported remaining performance obligations near $553 billion, a backlog of signed deals not yet delivered that rose about 325% year over year, with media also reporting a large OpenAI commitment slated to begin in 2027.
- To fund the build, Oracle raised about $30 billion through investment-grade bonds and mandatory convertible preferred stock, moves bulls say secure liquidity but that also increase leverage on the balance sheet.
- Morgan Stanley kept an equal-weight rating and trimmed its target to $207, noting lower gross margins as Oracle ramps GPU hosting capacity and flagging customer concentration as a key risk to the long-term plan.