Key Takeaways
- On Wednesday, Oppenheimer elevated Oracle (ORCL) to Outperform status, establishing a $185 price objective
- Shares have plummeted from September’s $328.33 peak to approximately $149, slashing the valuation multiple by over 50%
- Lead analyst Brian Schwartz anticipates earnings per share could grow 2-3x by the close of fiscal 2030
- OpenAI’s expansion to over 800 million weekly active users and a prospective $100B capital raise are diminishing counterparty concerns
- The company intends to secure $45B–$50B through debt markets to finance roughly $330B in capital spending through fiscal 2030
On Wednesday, Oracle (ORCL) received an analyst endorsement that sent shares climbing. Oppenheimer elevated its rating to Outperform from Perform and established a $185 price objective for the enterprise software giant.
The upgrade came from analyst Brian Schwartz, who contends that recent declines have created an attractive entry point with a compelling risk/reward profile.
Shares responded positively, climbing roughly 4% during the session to reach approximately $149.45 in premarket trading. However, this remains substantially below prior peaks.
The shares reached an all-time high of $328.33 on September 10, 2025, following the company’s disclosure of a $300 billion increase in outstanding customer contract commitments, heavily influenced by its partnership with OpenAI.
Following that milestone, the stock entered a prolonged downturn. Market-wide tech sector weakness, investor anxiety about financing requirements, and uncertainty surrounding OpenAI’s ability to fulfill its financial commitments all contributed to negative sentiment.
The compression in valuation has been dramatic. ORCL currently trades at roughly 19 times projected earnings, down from over 40 times during the September timeframe.
While acknowledging that “multiples can always go lower,” Schwartz noted the significant decline “limits the magnitude of the downside at current levels.”
Counterparty Concerns Diminishing
A significant element of the bearish narrative centered on Oracle’s heavy reliance on OpenAI as a critical customer. Those worries appear to be subsiding.
OpenAI’s weekly active user base surged past 800 million as of early February, showing renewed momentum. The AI leader is reportedly assembling its inaugural enterprise sales organization and securing commercial contracts.
Additionally, OpenAI appears poised to finalize a $100 billion capital raise. This substantial funding would significantly strengthen confidence in the company’s capacity to honor its Oracle commitments.
The Oppenheimer team also highlighted TikTok as another significant customer win that helps diversify counterparty exposure.
Capital Raising Momentum
Oracle’s other critical challenge involves securing sufficient capital for its ambitious expansion plans. Oppenheimer projects approximately $330 billion in required capital expenditures extending through fiscal 2030.
The company took a meaningful step toward addressing this need earlier this month by revealing intentions to raise between $45 billion and $50 billion via bond offerings.
This capital deployment will directly fuel Oracle Cloud Infrastructure expansion, according to Schwartz and colleagues.
Even under a conservative scenario incorporating a 25% reduction to management’s revenue projections, Oppenheimer’s model shows earnings per share more than doubling by fiscal 2030. Under an optimistic scenario with only a 10% revenue haircut, EPS approaches triple the current level.
Schwartz positioned Oracle as a premier large-cap earnings growth opportunity for the remainder of the decade.
The firm characterized the upgrade as taking a “contrarian bet.” Despite the substantial decline, institutional ownership of Oracle remains relatively light, the analysts observed.
Nevertheless, Wall Street consensus already leans positive. Among the 45 analysts monitored by FactSet, 78% maintain Buy-equivalent ratings — an increase from 67% when shares peaked in September.
D.A. Davidson executed a comparable upgrade two weeks earlier, lifting Oracle to Buy from Hold with a $180 target.
Schwartz acknowledged the timing “may prove early,” characterizing ORCL as a “show me stock” requiring sustained operational performance to convince skeptical market participants.
