TLDR
- Oracle shares surged 9.6% Monday to $155.95 following D.A. Davidson upgrade to Buy rating.
- Analyst Gil Luria cited OpenAI’s $40 billion cash position and possible $100 billion additional funding.
- TikTok USA partnership brought Oracle approximately $800 million in revenue during 2025.
- Stock remains down 55% from September high of $328.33 despite Monday’s strong performance.
- Oracle holds $130 billion in debt and $248 billion in operating-lease commitments.
Oracle delivered its strongest daily performance in months on Monday. Shares closed up 9.6% at $155.95.
The rally followed a D.A. Davidson upgrade to Buy from Neutral. Analyst Gil Luria kept his price target at $180.
Luria’s bullish call focused on OpenAI’s strengthened financial position. The AI company now appears better equipped to pay for Oracle’s services.
OpenAI currently has about $40 billion in cash reserves. The startup may raise another $100 billion before the quarter ends, per D.A. Davidson estimates.
These funds will cover costs for the data centers Oracle is constructing. Market sentiment had turned negative on this partnership.
“Since the market is currently assigning the OpenAI relationship a negative value, we believe the fundraise will serve as a catalyst for outperformance,” Luria wrote.
Oracle hit $328.33 per share in September. The stock has fallen 55% since that record high.
September’s surge came after Oracle announced $300 billion in new contract obligations. The excitement quickly faded.
Investors discovered one OpenAI contract represented the majority of that backlog. OpenAI doesn’t generate profits, sparking payment concerns.
OpenAI Relationship Gets Fresh Look
D.A. Davidson had previously taken a critical stance on the Oracle-OpenAI deal. That view has changed.
“We believe that a revamped OpenAI will return to its position as Google’s top challenger,” Luria wrote. With new capital, OpenAI should meet its Oracle obligations this year.
The analyst dismissed fears about AI disrupting Oracle’s software business. Companies will continue paying for Oracle’s products, he argued.
Luria believes the market now appropriately reflects the risks involved. His upgrade signals growing confidence in the partnership’s viability.
TikTok USA Provides Additional Revenue
Oracle’s TikTok USA deal adds another growth avenue. The company owns a 15% stake in the restructured business.
TikTok USA generated roughly $800 million for Oracle last year. The partnership locks in TikTok USA as a cloud services client.
It also opens doors for expanded work with parent company ByteDance. Oracle secured its stake at a favorable price.
Vice President JD Vance valued TikTok USA at $14 billion. That figure came in below market expectations.
Oracle faces major financial obligations going forward. The company carries $130 billion in debt.
Operating-lease commitments total another $248 billion. “These will burden the company for years to come,” Luria noted.
Yet the analyst believes Oracle has the right partnerships to navigate these challenges. The OpenAI and TikTok deals provide revenue momentum.
Oracle reports earnings on March 9. Investors will receive updates on both partnerships during the call.
Monday’s stock movement reflects changing perceptions. What was viewed as a risky OpenAI bet may be turning into an opportunity.
The upgrade represents a shift in Wall Street sentiment. Analysts are reassessing Oracle’s AI infrastructure investments.
Luria’s note emphasized OpenAI’s improved funding runway. This removes a major uncertainty that had weighed on Oracle shares.
The TikTok component adds diversification to Oracle’s growth story. Multiple revenue streams reduce dependence on any single partnership.
D.A. Davidson’s price target of $180 implies 15% upside from Monday’s close. The firm sees room for further gains if partnerships deliver.
