- Deutsche Bank reaffirmed a “Buy” rating on Oracle and set a $375 price target.
- Oracle shares rose nearly 2% in pre-market trading following the rating update.
- The recent stock pullback is considered an attractive entry point by analysts.
- The current share price is believed to not fully reflect Oracle’s business with OpenAI.
- OpenAI has reportedly agreed to purchase $300 billion in computing capacity from Oracle over five years, supporting ChatGPT and other AI projects (details here).
Deutsche Bank has maintained its “Buy” rating and a $375 price target for Oracle, referring to the company’s recent stock decline as a favorable opportunity for new investors. The move comes as Oracle shares increased by nearly 2% in early trading, making it the second-most discussed stock on Stocktwits.
An analyst from Deutsche Bank observed that the current valuation of Oracle does not fully recognize the company’s partnership with OpenAI. The analyst stated, “The shares, at current levels, give Oracle little, if any, credit for its business with OpenAI.” While the agreement with OpenAI brings with it certain financial and operational risks, the analyst believes these are outweighed by significant growth opportunities.
As reported, OpenAI has signed a deal with Oracle to purchase $300 billion worth of computing capacity over the next five years to power its ChatGPT service and related Artificial Intelligence initiatives (read more). This large-scale commitment is seen as a major step for both organizations.
The report suggests that the market may be underestimating the impact of this deal on Oracle’s future business and earnings, according to the insights provided by Deutsche Bank.
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