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

Oracle Corporation (NYSE:ORCL) is one of the AI Stocks on the Market’s Radar. On October 7, Mizuho analyst Siti Panigrahi reiterated an Outperform rating on the stock with a $350.00 price target. The firm noted how shares traded down after an article from “The Information” which called out weakness in AI margins.

However, the firm sees “minimal incremental information” in the article beyond issues that have already been discussed. It also noted how parts of the article actually support the view that Oracle’s profit margins will improve as the company scales.

“ORCL shares are trading lower intra-day (down ~6% vs. QQQ down ~60 bps) following an article from The Information (link) calling out weakness in AI margins. We see minimal incremental information in the article beyond surfacing key debates that we already addressed in our recent note (Addressing Key Investor Debates Ahead of AI World/Analyst Day on October 16).”

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“Moreover, we believe the below quotes are supportive of improving gross margins with scale and reinforce our 25% gross margin assumption. We view today’s weakness as a buying opportunity, and we remain bullish into ORCL’s AI World/Financial Analyst Day next week, which we view as a major catalyst where the company will clarify many of these debates.”

Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.

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