Bank of America raised its price target for Oracle (NYSE:ORCL) to $295 from $220 in a note Tuesday, citing stronger-than-expected capital expenditure guidance from major tech companies and growing momentum in the artificial intelligence (AI) infrastructure cycle.
The new target implies a 17% upside from Oracle’s latest closing price of $252.53.
“It is clear that demand for AI infrastructure is ramping,” BofA analysts wrote, highlighting recent guidance from Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META).
Microsoft forecast more than $30 billion in capex for the September quarter, “well ahead of our prior estimate for $23.5 billion,” while Meta guided full-year capex to $69 billion, up from BofA’s $67 billion estimate.
“We view these as demand signals into a large addressable market for AI infrastructure,” the analysts said, adding that this cycle is likely to benefit Oracle’s OCI platform.
BofA pointed to Oracle as a key beneficiary of growing demand for third-party AI infrastructure.
“We are entering the next wave of adoption, which is likely to benefit key AI infrastructure vendors, including Oracle,” the analysts wrote, citing Microsoft’s recent earnings commentary.
The firm estimates the addressable market for agentic AI at $155 billion, calling it “8% additive to the current TAM for software.”
Despite the higher price target, BofA reiterated its Neutral rating on Oracle, noting limited visibility into how much the AI infrastructure opportunity will boost revenue.
“The bull/bear debate on the stock centers on how material the AI infrastructure opportunity is for Oracle and the magnitude of upside to topline growth targets,” they wrote, citing a “nascent stage of the AI infrastructure build.”
