Oracle Stock Surges 9.6% on Analyst Upgrade Amid AI Infrastructure Bet

Quick overview

With analysts growing increasingly enthusiastic about the company’s artificial intelligence strategy and alliances, Oracle Corporation (NYSE: ORCL) shares surged 9.6% on Monday to close at $156.59, the enterprise software giant’s highest trading session since a stunning 35% gain last September.

The OpenAI Factor: From Skepticism to $300 Billion Confidence

Oracle’s rating was raised from “neutral” to “buy” by D.A. Davidson, which kept its price target at $180. “Considering Oracle’s move from $345 intraday (in September) to the current $143 and subsequent moves down in Nvidia and Microsoft tied to OpenAI concerns, we believe the market has overshot to the downside,” analyst Gil Luria wrote in a note to clients, arguing that the market had overreacted to worries about Oracle’s massive AI infrastructure commitments, particularly its partnership with OpenAI.

The upgrading signifies a significant change in attitude. The dangers are “more appropriately reflected” in current valuations, according to Luria, who has previously criticized both Oracle and OpenAI. With an estimated $40 billion in cash on hand and the potential to raise an additional $100 billion by the end of the quarter to support its infrastructure requirements, the analyst cited OpenAI’s improved financial situation.

Over the last six months, Oracle’s stock has seen unusual volatility. After revealing a huge backlog of cloud contracts, including a $300 billion agreement with OpenAI, the stock shot up in September. Shares fell over 60% from their September peak of $345.72 as a result of a severe sell-off that lasted until year’s end due to concerns about the cash needed to meet these obligations.

The company’s problems have persisted into 2026; before Monday’s recovery, shares had dropped 15.6% in January and 5% in February. Oracle’s stock has risen 81.5% over the last three years and 165.8% over the last five, despite the current volatility.

Oracle has made large financial commitments as part of its ambitious AI agenda. In order to finance new data centers and satisfy the soaring demand for AI, the business intends to raise between $45 billion and $50 billion through a combination of debt and equity offerings. As investors processed the ramifications of the dilution, the company was initially under pressure following the announcement of this capital raise last week.

Luria warned that the stock is “far from a clean story” and that the equity offering might drag on shares for weeks, while acknowledging that Oracle confronts execution challenges. “The company has put itself in a very precarious position and will have to execute well to get out of this predicament,” warned him.

TikTok US: Oracle’s Role as “Trusted Security Partner”

Analysts, however, believe Oracle’s revival is being aided by a number of catalysts. By operating TikTok U.S. as a joint venture, the business “locks in” a significant customer for Oracle Cloud Infrastructure while also offering benefits from its ownership of the well-known app. Furthermore, D.A. Davidson denied concerns that Oracle’s enterprise software products would be replaced by AI coding tools, arguing that they cannot be simply “vibe coded away.”

As competition for AI workloads heats up, Oracle is establishing itself as a rival to hyperscale cloud providers like Amazon, Microsoft, and Google. The speed at which the business can implement its new infrastructure and turn capacity into income will be crucial to the strategy’s success.

Oracle shares are trading 43% below the average analyst prediction of $275.59 at Monday’s closing price, indicating substantial upside potential should the firm be able to carry out its ambitious plans for AI infrastructure.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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