Melius' Ben Reitzes reiterates buy rating reflects revenue growth in Oracle

Core Viewpoint - The investment community has not yet entered an AI bubble, with Oracle's stock being positively viewed and a price target raised from 270 to 370, maintaining a buy rating [1]. Company Analysis - Oracle's recent stock performance has been favorable, and the company is expected to see significant growth, particularly in FY28, with growth projections increasing from 19% to over 50% [3]. - The shift towards lower-margin business is noted, but the overall growth potential in the market, especially in software and cloud infrastructure, is seen as a positive factor for Oracle [4]. - Oracle is currently trading at under 30 times earnings for FY28, which is considered attractive given the anticipated revenue growth [4][5]. Industry Insights - The software as a service (SaaS) sector is facing challenges due to AI advancements, but companies that have invested in cloud infrastructure are expected to perform better [4]. - The AI inferencing market is described as a significant opportunity, likened to a razor and blade model, where initial investments lead to substantial ongoing revenue [8]. - Major industry players are projected to invest nearly a trillion dollars in infrastructure, indicating strong confidence in future growth [6][9].