Reset and Reload

Oracle $ORCL ( ▲ 1.64% ) has fallen 24% this year and 14% over the past 12 months.

Oppenheimer $OPY ( ▲ 0.84% ) believes that sell-off has gone too far.

The firm upgraded the stock to Outperform from Perform and set a $185 price target, implying roughly 25% upside. Analyst Brian Schwartz called the setup a favorable risk-reward after multiples were cut by more than half since September.

Schwartz described Oracle as a superior earnings per share compounder.

In his base case, he sees EPS doubling by fiscal 2030. In his bull case, earnings could triple over that period.

The analyst acknowledged the call may be early, noting it will take time for Oracle to demonstrate financial success as it shifts toward a more capital-intensive model. Still, he believes improving earnings momentum could catalyze better investor sentiment.

Oppenheimer also argued that key overhangs are fading.

Counterparty concerns tied to OpenAI appear to be easing amid renewed funding momentum. Recent capital raise announcements should support cloud infrastructure growth, which Schwartz sees as relatively insulated from AI-driven disruption.

He noted Oracle’s non-financial ERP applications represent only a small portion of revenue, limiting exposure to AI displacement.

For Oppenheimer, the math is straightforward. Risks are moderating, growth investments are ramping, and valuations have already reset. That combination makes the dip look buyable.