Mizuho Reiterates Outperform on Oracle (ORCL) with $350 Target Despite AI Margin Concerns

Oracle Corporation (NYSE:ORCL) remains a notable presence among the AI Stocks currently attracting attention. On October 7, Mizuho analyst Siti Panigrahi reaffirmed an Outperform rating for the stock with a price target set at $350.00. The report highlighted that shares reacted negatively following a piece from “The Information,” which pointed out challenges in AI profit margins.

Nevertheless, the firm believes the article offers “minimal incremental insights” beyond previously stated concerns. Furthermore, they noted that portions of the article actually bolster the belief that Oracle’s profit margins should strengthen as the company expands its operations.

“ORCL shares are experiencing a decline during the day (down approximately 6% while QQQ is down around 60 basis points) after an article from The Information (link) highlighting weaknesses in AI margins. We perceive limited new information in the article, as it merely reiterates points we’ve previously addressed in our latest communication (Addressing Key Investor Debates Ahead of AI World/Analyst Day on October 16).”

Ken Wolter/shutterstock.com

“Additionally, we believe the quotes below support the outlook for enhanced gross margins as the company scales, confirming our assumption of a 25% gross margin. We see today’s stock price dip as a buying opportunity, and we remain optimistic heading into ORCL’s AI World/Financial Analyst Day next week, which we consider a key event for clarifying these ongoing conversations.”

Oracle Corporation (NYSE:ORCL) is recognized for its database management and cloud services.

While we appreciate ORCL’s potential as an investment, we contend that other AI stocks may present more attractive upside potential while posing lesser risks. For those interested in a significantly undervalued AI stock that stands to benefit greatly from recent tariffs and the onshoring trend, check out our complimentary report on the top short-term AI stock.

READ NEXT:10 AI Stocks Recently Highlighted for Investors and 10 Trending AI Stocks to Monitor

Disclosure: None.