Oracle stock closed trading Tuesday up 2.5%, after scoring an upgrade from an analyst who focused on the tech giant's cloud business and potential as an artificial intelligence leader.
Barclays analyst Raimo Lenschow boosted his price target for Oracle to 150 from 126. He also upgraded Oracle stock to overweight.
The nearly 50-year-old database company's transition to cloud services is gaining momentum, the report said.
"We have been waiting many years for Oracle to reemerge from its cloud transition, and we now see enough evidence to be confident in this being the beginning of a multiyear growth story that should be interesting for long term focused investors," Lenschow wrote in a note to clients.
Cloud Positioned For AI
The company's cloud software businesses can outweigh lower growth parts of the business, the report said.
Oracle's cloud infrastructure business is also "positioned favorably for AI workloads," the report said, because of the company's relationship with Nvidia. Moreover, Oracle is one of the first cloud service providers to come to market with Nvidia's software-as-a-service products, Lenschow wrote.
Oracle stock jumped 2.5% to close at 123.98 on the stock market today. The company's shares have gained 54% on the year coming into trading Tuesday, compared with a 17.6% rise for the S&P 500 index.
Further, Oracle on Tuesday announced the date of its fiscal 2024 first-quarter earnings. The company will report results after the close on Monday, Sept. 11.
Oracle Stock: Second Upgrade In Seven Days
The Barclays upgrade comes a week after UBS analyst Karl Keirstead upgraded shares to buy from neutral. Further, UBS upped its target price on Oracle stock to 140 from 120.
UBS report similarly cited believes the company's potential to benefit from AI.
"Oracle has carved out an underappreciated edge in terms of its GPU (graphics processing unit) capacity as well as its OCI architecture," Keirstead said in a note to clients.
