Baird Initiates Oracle (ORCL) at Outperform With $365 Target, Calls It a Major AI Beneficiary

Oracle Corporation (NYSE:ORCL) is recognized as one of the prominent AI stocks worth monitoring. On October 9, Baird commenced coverage of the stock with an “Outperform” rating, highlighting that Oracle is “at the forefront of the most transformative trend in computing history: AI.”

“We are initiating our coverage of Oracle with an Outperform rating and a price target of $365.”

Analyst Rob Oliver emphasized the firm’s strong positioning in the artificial intelligence growth narrative.

“We believe ORCL is ideally positioned to capitalize on the increasing investments in AI infrastructure as well as the convergence of AI, data, and various use-cases resulting from the transition from training to inference.”

Beyond AI, Oracle possesses a robust ecosystem of applications, data, and networking, providing investors with broad exposure to the wider computing landscape due to the company’s extensive software and application portfolio.

“The mix of resources it offers — scaled infrastructure, databases, networking, and applications — fosters a positive feedback loop that we believe can sustain a premium valuation and drive shares beyond the current infrastructure scarcity trend.”

The shift in Oracle’s revenue towards cloud computing could facilitate a revenue growth acceleration to over 20%.

“The key drivers of spending on SaaS applications and infrastructure should enable several years of above-average growth, while operating margins have consistently remained around 40-45% despite a cycle of increased investments.”

Oracle Corporation (NYSE:ORCL) specializes in database management and cloud services.

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Disclosure: None.