Dan Ives Says Oracle And IBM Are The 'New Microsoft' In Big Catch-Up Trade: 'Broader AI Tailwind Is Far From Priced In'

Oracle Corp. ORCL and International Business Machines Corp. IBM may be staging their biggest comeback in years, according to senior Wedbush Securities analyst Dan Ives.

What Happened: During his recent appearance on the RiskReversal podcast on Tuesday, Ives drew parallels between the current trajectories of Oracle and IBM, and that of Microsoft Corp. MSFT prior to its breakout in mid-2023, when the AI momentum first began.

“I kind of view IBM and Oracle similar to how I viewed Microsoft in mid-2023,” Ives said, while adding that the broader AI tailwind is far from priced in.

Ives believes there will be a wave of rotation into underappreciated AI beneficiaries such as Oracle and IBM as institutional investors play catch-up.

“From an institutional perspective, especially when it comes to AI, I think you are seeing catch-up trades to Oracle. I think you're seeing it with IBM,” he says.

Ives highlighted that both firms have massive installed bases and their positioning within the enterprise AI sales cycle as reasons for the bullish outlook. He says they are now essentially AI infrastructure providers, not unlike Microsoft, during the early stages of Azure-OpenAI integration.

Why It Matters: Last week, Oracle stunned the markets with its fourth quarter results, with a beat on consensus estimates at the top and bottom lines, coupled with significantly better guidance for 2026.

On Tuesday, Oracle announced the launch of its Defense Ecosystem, aimed at enhancing tech adoption in the defense and government sectors.

IBM’s tactical foray into AI has similarly garnered praise from analysts and investors, with Ives himself commenting on the stock, saying that he was “incrementally more bullish” following the IBM Think conference in Boston last month. He reiterated his “Outperform” rating on the stock, with a price target of $300, a 6% upside from current levels.

Price Action: Shares of Oracle were down 1.38% on Tuesday, trading at $208.18, while IBM closed up by 0.43%, at $283.05.

According to Benzinga’s Edge Stock Rankings, Oracle scores well on Momentum, ranked in the 89th percentile, and has a favorable price trend in the short, medium, and long term, but how does it compare with IBM? Click here to find out.

Photo courtesy: Sundry Photography / Shutterstock.com

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