Oracle (ORCL) Initiated at Sell by Rothschild Redburn, $175 Price Target Set

Oracle Corporation (NYSE:ORCL) is one of the Buzzing AI Stocks on Wall Street. On September 25, Rothschild & Co Redburn initiated the stock at “Sell” stating that it sees too many negative catalysts for Oracle. The firm holds a $175 price target on the stock.

According to the firm, the market is materially overestimating the value of Oracle’s contracted cloud revenues. In big, single-tenant, large-scale deployments, the company acts more like a financier than a cloud provider, “with economics far removed from the model investors prize.”

Oracle’s five-year cloud revenue guidance is equal to $60B in value. This reflects that the market is already pricing in a “risky blue-sky scenario that is unlikely to materialize.”

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“While the market currently fixates on headline figures, we expect attention to shift toward the underlying economics. Combined with subdued non-IaaS [infrastructure as a service] growth— which the market appears willing to overlook for now—this sets up meaningful downside risk. Consequently, we launch coverage with a Sell rating and a $175 target price.”

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

While we acknowledge the risk and potential of ORCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ORCL and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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