Quick Overview
- Dan Ives from Wedbush Securities increased Oracle’s price target to $275 from $225 on May 13, the second upward revision in fewer than 21 days.
- Despite robust business fundamentals, Oracle’s shares currently trade approximately 50% lower than their September 2025 high.
- Oracle Cloud Infrastructure posted 84% year-over-year revenue expansion, reaching $4.88 billion in the latest quarter.
- The firm’s remaining performance obligations backlog has surged to $553 billion, representing 438% annual growth and featuring a $300 billion OpenAI cloud agreement.
- According to Wedbush, Wall Street is misinterpreting Oracle’s substantial capital expenditures, which are supported by committed customer contracts rather than speculative bets.
On May 13, Wedbush Securities analyst Dan Ives boosted his Oracle (ORCL) price objective to $275 from $225 while maintaining an outperform rating. This marks the second upward adjustment in under three weeks.
Wedbush originally began coverage on April 24 with an outperform stance and a $225 price objective, characterizing Oracle as “a foundational infrastructure provider for the AI revolution.”
Oracle stock currently trades about 50% beneath its September 2025 high watermark. This substantial difference between current trading levels and Wedbush’s projection represents one of the most significant valuation gaps on Wall Street at present.
Ives initially maintained the $225 target on April 28 following a steep decline in Oracle shares triggered by a Wall Street Journal article that questioned OpenAI’s internal revenue projections.
He characterized that market reaction as a “way overreaction,” emphasizing Oracle’s contracted backlog as proof that fundamental demand remains genuine and secured through binding agreements.
The Massive $553 Billion Commitment Pipeline
The metric Wedbush consistently emphasizes is Oracle’s $553 billion in remaining performance obligations. This figure signifies multi-year customer commitments for cloud services and AI infrastructure that have yet to be fulfilled or recognized as revenue.
This backlog has exploded by 438% compared to the prior year. Within this total sits a five-year, $300 billion cloud services agreement with OpenAI.
Such extensive forward revenue visibility is uncommon in the tech industry. Wedbush believes the investment community is undervaluing this metric while placing excessive emphasis on short-term capital spending worries.
Oracle Cloud Infrastructure revenues jumped 84% year-over-year to $4.88 billion during the most recent reporting period. Gross margins for AI infrastructure operations reached 32%, surpassing the company’s own 30% minimum guidance threshold.
Profitability and Revenue Generation
The multicloud database segment operates with gross margins spanning 60% to 80%. This favorable business mix is enhancing overall profit margins as the infrastructure segment continues expanding.
Ives has been forthright in his public statements. “I think Oracle is going to be a tremendously bigger company in the next two, three or four years than it is today,” he stated during a Bloomberg interview.
“This stock ultimately could double as they monetize A.I. over the coming years,” he added, per The Daily Hodl.
Wedbush’s fundamental thesis centers on the notion that the market is misinterpreting Oracle’s capital expenditure cycle. The firm contends that investors are viewing significant spending as a liability when it actually reflects contract-secured commitments tied to verified customer demand.
The research firm indicates growing confidence in the OpenAI partnership and an increasingly optimistic outlook on the broader data center narrative.
Oracle received its second price target increase from Wedbush within a three-week span on May 13, 2026.
