Guggenheim Reaffirms Buy on Oracle, $400 Price Target

Guggenheim analyst John DiFucci reiterated a Buy rating and $400 price target on Oracle (NYSE: ORCL).

“We attended Oracle AI World, Investor Meeting, and hosted a dinner with SVP of IR Ken Bond.

Oracle management went a long way in addressing some of the tactical factors pressuring the stock, while reiterating the strong fundamentals of the business that most investors have acknowledged, though that’s not what’s been driving the stock of late.

The company anticipates that it will only have to raise a total of $20B more to fund the long-term revenue guidance culminating with $225B+ in 2030 revenue.

This $20B will be split evenly between debt and equity and could start this calendar year.

Of the $220B in capex needed from now through the end of FY28, half is expected to be funded by either upfront payments by customers, vendor financing, or BYOH.

We believe capex will peak in FY28 and we estimate about an additional $150B in gross capex will be required to fund additional capacity additions to meet revenue targets through FY30.

Importantly, Oracle should turn FCF profitable in F2H28 and be comfortably profitable in FY29.

We believe that even if additional deals not currently embedded in long-term guidance are signed in later years, FY29 FCF should remain profitable.

Oracle remains our Best Idea and we maintain our Price Target of $400.”

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