Will Oracle's (ORCL) AI Bet Pay Off After Multi-Billion-Dollar AI Data Center Deals?

Oracle Corp. (NYSE:ORCL) is one of the best stocks to buy according to Citadel LLC. On October 20, BMO Capital Markets analyst Keith Bachman reaffirmed his Outperform rating and unchanged price target of $355.

The analyst expects Oracle’s long-term growth to be supported by its Oracle Cloud Infrastructure (OCI) and database businesses, which are expected to expand in the coming years, given the company’s focus on these. Moreover, as these businesses gain scale, the analyst expects profitability to improve with better operating margins, eventually supporting earnings growth. He particularly highlighted the potential to enhance profitability for its Infrastructure-as-a-Service (IaaS) portfolio.

Bachman further believes that the company would see deeper customer adoption and broader monetization across its platform through the integration of AI into Oracle’s database and cloud solutions.

Oracle’s ability to profitably deliver on its recent multi-billion-dollar data center deals with customers such as OpenAI and Meta Platforms has been under scrutiny. As per a Bloomberg report from October 16, Bank of America analyst Brad Sills recently said that the company faces “supply constraints across land, buildings, energy, and GPUs” and the market will keep an eye on the pace at which it delivers the facilities.

Oracle Corp. (NYSE:ORCL) offers an extensive suite of database and cloud computing software and hardware. The Company offers databases and relational servers, application development and decision support tools, as well as enterprise business applications.

While we acknowledge the potential of ORCL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.