Oracle (ORCL) Stock Gets $275 Target as Evercore Highlights Long-Term OCI Growth

Oracle Corporation (NYSE:ORCL) is one of the Buzzing AI Stocks on Wall Street. On December 15, Evercore ISI reiterated an “Outperform” rating on the stock with a $275 price target. The firm is confident in Oracle’s long-term OCI growth post-quarterly results, highlighting $76B cloud revenue potential and lease math supporting OCI ramp.

Citing Oracle’s earnings call, Evercore ISI noted that the company doesn’t need to start paying for the leases until the data center is delivered to the company. This will spread the seemingly large figure over the course of 15-19 years.

Assuming an average length of 17 years, it said that the annual cost works out to be an estimated $14.5B, or $1.2B per month. This level of spending will get an estimated 7.6GW of DC power.

The firm went a step further to work out annualized revenues, which it believes will be around $76B if each megawatt can support $10M of annual GPU cloud revenue.

Evercore ISI highlighted two key takeaways from these calculations.

“1) The above math would equate to leases being about 18% of the total cost to support the cloud revenue, which is largely in line with Oracle’s comments at the analyst day; and 2) The above revenue assumptions indicate that Oracle already has commitments to support 65% of the revenue ramp through FY29 (~$116bn in total OCI).”

Discussing reports about the delay in the Michigan site, the firm further noted that Oracle builds delivery buffers in its plans and that the largest ramp in the OpenAI deal is from FY27 to FY28.

“We believe a pushout to FY28 in delivery would not change the OCI revenue ramp dramatically. But clearly not a great headline given the recent price action.”

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

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