Guggenheim Reiterates Buy on Oracle (ORCL), Keeps Stock as Software 'Best Idea

Oracle Corporation (NYSE:ORCL) is one of the Buzzing AI Stocks Analysts are Watching. On January 20, Guggenheim analyst John DiFucci reiterated a Buy rating on the stock with a $400.00 price target. ORCL remains firm’s “Best Idea” in the software sector.

The firm has addressed several factors in its report, including reviewing its thesis on ORCL, acknowledging investor concerns, and introducing incremental work on its financial model.

A few of the investor concerns Guggenheim highlighted include Oracle’s commitment to investment-grade debt and recent press issues, as well as real concerns regarding customer concentration, particularly OpenAI.

However, Guggenheim believes that these concerns are outweighed by the company’s strategic positioning, financial discipline, and long-term growth opportunity. For the firm, Oracle remains the best opportunity in the software sector.

Oracle, the firm noted, has a “better mousetrap” in cloud infrastructure built on lessons learned by others that came before it (particularly Amazon Web Services). This, combined with unique enterprise-grade technologies, enables incomparable scaling and security.

It has therefore deemed Oracle a “decade stock” that will witness growth at a “hyper rate” with cash flows that will “waterfall” over the longer term. However, it also cautioned that investors will have to wait for that to happen.

We see this as an opportunity for investors with a longer time horizon, a few years rather than a few weeks or months, to start to build a position. While we keep calling this a decade stock (because we believe it is), we expect the numbers to be irrefutable in half that time and be obvious long before that. As a result, ORCL remains our Best Idea with a $400 Price Target.

Oracle Corporation (NYSE: ORCL) is a database management and cloud services provider.

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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