1. Oracle Corporation (NYSE:ORCL)
Potential Upside: 71.6%
On July 6, Billy Fitzsimmons, an analyst at Piper Sandler, reiterated a Buy rating on Oracle Corporation (NYSE:ORCL) and set a target price of $225. The analyst’s price target reflects a further 56% upside from current levels.
On a more positive note, on July 1, ORCL was added to William Blair’s Conviction List, an investment firm. The firm believes the company will outperform the broader market because it is likely to be one of the major beneficiaries of artificial intelligence. Hyperscalers have signed multiyear cloud capacity commitments with Oracle. This has boosted its remaining performance obligations and provided revenue visibility. Furthermore, with the AI tailwind, the cloud computing giant is well positioned for accelerating revenue growth. Its full-stack capabilities, including the OCI cloud platform, database business, and enterprise applications, support its ability to benefit from rising AI infrastructure demand.
However, the company noted that building new data centers may end up costing more or taking longer than expected. This could happen because of supply chain issues, government restrictions on data center development, or the failure of third parties to complete projects on schedule. The company believes its profitability could be affected if it cannot secure data center capacity at affordable costs or properly manage its infrastructure needs. The stock’s recent performance was already suffering mainly due to fears that its RPO depended heavily on OpenAI’s success. Uncertainty around data center cost will likely drag the price down in the short term.
Oracle Corporation (NYSE:ORCL) provides information technology-related products and services to enterprises through its main business segments: Cloud and License, Hardware, and Services. The company is based in Austin, Texas, and was founded in June 1977 by Lawrence Joseph Ellison, Robert Nimrod Miner, and Edward A. Oates.
While we acknowledge the potential of ORCL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ORCL and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: Top 10 Extreme Value Stocks To Buy Now and 8 Hidden Multibagger Stocks to Buy Now.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
