Concerns Over Oracle's Deal with OpenAI: Skepticism is rising regarding Oracle's multiyear agreement with OpenAI, which involves a $300 billion commitment for computing power, as OpenAI has yet to report a profit and relies heavily on this single customer for its financial outlook.
Market Reactions and Analyst Opinions: Despite Oracle's recent stock surge, analysts express caution due to customer concentration risks and the unclear financial viability of OpenAI, with some maintaining neutral ratings on Oracle's stock amid concerns about its high leverage and cash position compared to competitors.
Potential AI Bubble: Experts warn that the rapid rise in Oracle's stock may indicate a peak in the AI bubble, highlighting vulnerabilities in OpenAI's business model and the speculative nature of the interconnected AI ecosystem reliant on partnerships and infrastructure investments.
Financial Comparisons and Risks: Oracle's cash reserves are significantly lower than major competitors like Microsoft and Alphabet, raising questions about its ability to sustain operations and fulfill its commitments, especially as it faces challenges in securing necessary hardware and managing debt.
Wall Street analysts forecast ORCL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ORCL is 352.52 USD with a low forecast of 175.00 USD and a high forecast of 415.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
37 Analyst Rating
Wall Street analysts forecast ORCL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ORCL is 352.52 USD with a low forecast of 175.00 USD and a high forecast of 415.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
25 Buy
11 Hold
1 Sell
Moderate Buy
Current: 192.840
Low
175.00
Averages
352.52
High
415.00
Current: 192.840
Low
175.00
Averages
352.52
High
415.00
UBS
Buy
downgrade
$325 -> $280
2026-01-05
New
Reason
UBS
Price Target
$325 -> $280
2026-01-05
New
downgrade
Buy
Reason
UBS lowered the firm's price target on Oracle to $280 from $325. Oracle's 41% drop from mid-September highs reflects investor concerns about its outlook and OpenAI's impact on related stocks, the analyst tells investors in a research note. Despite this, UBS reaffirms its Buy rating given pending revenue growth, the ramp of Abilene data center capacity, potential reversal of cautious OpenAI sentiment in 1H26, and largely embedded credit/financing risks.
RBC Capital
Rishi Jaluria
Sector Perform
downgrade
$250 -> $195
2026-01-05
New
Reason
RBC Capital
Rishi Jaluria
Price Target
$250 -> $195
2026-01-05
New
downgrade
Sector Perform
Reason
RBC Capital analyst Rishi Jaluria lowered the firm's price target on Oracle to $195 from $250 and keeps a Sector Perform rating on the shares. 2026 is likely to be a year when AI tailwinds become more evident for companies well positioned for enterprise AI adoption, while less prepared peers may remain pressured by the "AI is the death of software" narrative, the analyst tells investors in a research note. Enterprise spending appears to be stabilizing and improving in select areas, with GenAI driving innovation even as management teams remain conservative in early 2026 guidance, the firm says.
Phillip Securities
Buy
downgrade
$350 -> $344
2025-12-14
Reason
Phillip Securities
Price Target
$350 -> $344
2025-12-14
downgrade
Buy
Reason
Phillip Securities lowered the firm's price target on Oracle to $344 from $350 and keeps a Buy rating on the shares. The firm increased its fiscal 2026 capital expenditure forecast for Oracle to $50B from $35B. It remains "bullish on Oracle as a niche OCI provider and a full-stack AI provider."
Goldman Sachs
Kash Rangan
Neutral
downgrade
$320 -> $220
2025-12-12
Reason
Goldman Sachs
Kash Rangan
Price Target
$320 -> $220
2025-12-12
downgrade
Neutral
Reason
Goldman Sachs analyst Kash Rangan lowered the firm's price target on Oracle to $220 from $320 and keeps a Neutral rating on the shares. Oracle's Q2 showed modest revenue and cloud-growth shortfalls alongside sharply higher capex and free cash flow burn, amplifying concerns about financing needs, tenant concentration, and valuation, the analyst tells investors in a research note. Management reiterated FY26 revenue guidance and addressed balance-sheet worries, but the stock's decline reflects softer cloud momentum, a large capex increase without near-term revenue uplift, questions around OpenAI's commitments, and uncertainty about the sustainability of OCI's bring-your-own-chips and leasing mix, the firm says.
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
