Wells Fargo believes that recent weakness tied to worries over the AI trade have left Oracle undervalued. The bank reiterated its overweight stance on the software stock. Its $280 price target implies upside of 46% from Friday’s close. Shares of Oracle have tumbled 42% from their highs on the year in September. ORCL YTD mountain ORCL year to date Wells Fargo analyst Michael Turrin said that sentiment has skewed more negative in the near term. For instance, the “AI trade” narrative remains challenged, he wrote, given AI bellwethers facing competitive overhang. Some analysts have grown worried about Oracle’s high OpenAI exposure, the sustainability of its commits over the next few years and execution risks. “Feedback post launch has leaned more bearish, w/ investors asking questions around ORCL’s ability to deliver both from a financing & execution perspective given prior framed targets. We see all of the bad, but hardly any of the good being priced in,” the analyst wrote. However, Turrin noted that recent headlines for Oracle have finally started to tilt more positively. Specifically, investors have seemingly gained more confidence around Oracle’s deal to run TikTok’s U.S. business , expected to close Jan. 22, alongside OpenAI raising $100 billion. “More generally, bulls on ORCL: 1) view the sharp pullback as overdone w/ shares back to pre-OpenAI levels, 2) see potential for meaningful market share gains in cloud IaaS, & 3) think AI still v. early innings,” he said. Turrin added that OpenAI could represent between 25% to 30% of Oracle’s earnings for its fiscal 2028 to 2030 years.
