After underperforming over the last two years, Oracle Corporation ORCL is catching its stride, pushing KeyBanc Capital Markets analyst Monika Garg to upgrade Oracle to Overweight with a $61 price target.
4 Reasons Behind Garg’s Bullish Theses
- Oracle’s cloud growth could double over the next two years, generating a $12 billion run-rate.
- Oracle is just starting to capitalize on transitioning its current customer base to its cloud service. “While Oracle has added a significant number of new Oracle Cloud customers in the mid-market, the number of total cloud logos using its SaaS, PaaS, and IaaS solutions represent less than 5% of a large existing customer installed base that exceeds 400,000,” Garg said.
- AI will provide value to Oracle through “scale of data, helping elevate the power of incumbency for those having a large customer installed base and unique data sets,” Garg said.
- Margins might expand as cloud revenue continues to increase.
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