Oracle has traded in the red this summer, lagging its large-cap peers, but now the stock is likely to more than double in the near future, according to Citigroup. The bank has a buy rating on the artificial intelligence-linked name, and a $330 price target on shares, suggesting roughly 130% upside from Tuesday’s close. “We see opportunity after one of the most extreme dislocations and drawdowns in the stock’s history, driven by investor capitulation and multiple technical selling factors (credit spreads, [at the market] issuance),” analyst Tyler Radke said Wednesday in a report to clients. “Shares can work as continued robust AI demand trends and margin/pricing read-throughs from neoclouds set the stage for positive estimate revisions into earnings and investor day in late October.” Shares of Oracle have slumped 25% over the past three months on investor concern over mounting debt and credit downgrades, lagging its large-cap technology peers, which have gained an average of about 10% each, per Citi. ORCL 3M mountain Oracle over past three months The summer slide came as the AI trade lost steam due to questions over the sustainability of hyperscalers’ massive investments in the infrastructure that underpins the emerging technology. But Oracle should soon punch into the green as it clears some of the structural headwinds that have hurt the stock, Citigroup said. “We believe expectations have been reset with signs of investor capitulation, unusual forced selling dynamics in the rear view with a likely completed ATM equity offering, and recovering bond/[credit default swap] spreads,” Radke wrote. Citi’s call matches the Wall Street consensus, where 34 of 44 analysts rate Oracle a buy or strong buy, LSEG data shows.
