Wedbush Securities analyst Dan Ives says Wall Street is making a significant misjudgment on one of the most important AI infrastructure stocks in the market, creating a compelling opportunity for investors willing to look past the near-term concerns.
In a new Bloomberg interview, Ives pushes back against the prevailing skepticism around Oracle (ORCL), saying that Wall Street is dramatically underestimating its ability to monetize the AI revolution over the next several years.
While Ives acknowledges concerns about Oracle’s debt and balance sheet, he says the massive backlog in AI demand that the market is not properly valuing will likely offset those worries.
“I believe the Street is way miscalculating this name. I get the worries about the debt and what they’re taking on, given OpenAI and what they’re going for in terms of the $600 – $700 billion that they’re going after, and the $50 billion in debt.
I think Oracle is going to be a tremendously bigger company in the next two, three, four years than it is today. I think [investors are] way discounting their ability to monetize what’s going to be this backlog as more and more companies move to the AI revolution with Oracle.”
Ives lays out a $225 price target for ORCL but predicts the stock could shatter the $300 level.
“And that’s our whole point. I mean, $225 is the price target, but this stock, ultimately, could double as they monetize AI over the coming years. I think it’s way, way oversold.”
As of Monday’s close, ORCL is trading at $172.
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