With Meta And Microsoft Boosting Capex, Oracle's (ORCL) Rally Points To Major AI Tailwinds

Oracle Corp ORCL shares are trading higher Thursday morning as investors digest recent news highlighting the company’s aggressive push into artificial intelligence against a backdrop of strategic cost controls.

What To Know: Analyst optimism has been a significant driver for the stock over the past month, with Bernstein raising its price target to $308, projecting Oracle could become the fourth-largest global hyperscaler fueled by its cloud infrastructure growth.

Piper Sandler and Bank of America also issued favorable outlooks, with BofA increasing its target to $295, citing massive AI-related spending from tech giants like Microsoft and Meta as a key demand signal for Oracle’s services. The company recently secured a major deal to supply cloud infrastructure to OpenAI.

Furthering its AI ambitions, Oracle this week unveiled a new intelligent Electronic Health Record system, using voice commands and AI to streamline clinical workflows and challenge competitors in the healthcare space. This wave of positive developments was tempered, however, by reports of layoffs within its cloud unit.

The job cuts are seen as a move to manage soaring costs associated with building out its AI infrastructure, mirroring similar measures across the tech sector. While bullish on Oracle’s long-term AI strategy, some analysts remain cautious.

Bank of America, meanwhile, maintained a Neutral rating, citing a high valuation and uncertainty over how quickly the significant AI investments will translate into substantial revenue growth.

Benzinga Edge Rankings: According to Benzinga Edge stock rankings, Oracle demonstrates exceptional Momentum with a score of 92.95, indicating strong recent price performance and positive investor sentiment. The stock also shows a solid Growth profile, scoring 63.32, which suggests healthy expectations for future expansion in revenue and earnings.

The stock’s Value score is otherwise notably low at 12.83. This suggests that, based on current fundamental metrics, ORCL is considered expensive, aligning with analyst concerns about its high valuation following its recent run-up in price.

Price Action: According to data from Benzinga Pro, ORCL shares are trading higher by 0.34% to $244.96 Thursday morning. The stock has a 52-week high of $260.87 and a 52-week low of $118.86.

How To Buy ORCL Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Oracle’s case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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