Oppenheimer upgraded Oracle (ORCL) stock from Perform to Outperform on Wednesday, setting a price target of $185. The upgrade, led by analyst Brian Schwartz, is described as a "contrarian bet" based on a favorable risk/reward profile after the stock's valuation multiple was cut by more than half since its peak.
Oracle shares were trading up around 3-4% on the news, hitting approximately $149.45. This remains far below its all-time high of $328.33 reached on September 10, 2025, following the announcement of a $300 billion surge in remaining customer contract obligations, much of it tied to OpenAI. Since that peak, the stock has been in a steady decline due to a broader tech pullback, concerns over Oracle's massive financing needs, and counterparty risk questions related to OpenAI.
The valuation compression is significant: ORCL now trades at around 19 times forward earnings, down from above 40 times in September. Schwartz argued that this selloff "limits the magnitude of the downside at current levels." He projects that Oracle's earnings per share (EPS) could more than double by fiscal year 2030 in his base case, and nearly triple in a bull-case scenario assuming only a 10% guidance haircut.
A key factor easing investor concerns is the reduced counterparty risk associated with OpenAI. Oppenheimer notes that OpenAI's weekly active users have re-accelerated to over 800 million as of early February, the company is building its first enterprise sales team, and it is reportedly nearing a massive $100 billion funding round. These developments improve confidence in OpenAI's ability to meet its long-term obligations to Oracle. The firm also cited TikTok as another major customer helping to diversify risk.
Financing Oracle's ambitious capital expenditure plan remains central to the story. Oppenheimer estimates the company needs approximately $330 billion in capex through fiscal 2030 to fund its AI and cloud infrastructure expansion. Earlier this month, Oracle took a major step by announcing plans to raise $45 billion to $50 billion via a bond issuance, which Schwartz says will directly support Oracle Cloud Infrastructure growth while limiting balance-sheet strain.
Schwartz acknowledged the call "may prove early," labeling ORCL a "show me stock" that will need to deliver consistent financial results to win over skeptical investors. The broader analyst community is already fairly bullish, with 78% of 45 analysts tracked by FactSet rating ORCL a Buy equivalent.
