DA Davidson Slashes Oracle (ORCL) PT to $200 After Revealing Single Customer, OpenAI, Drove RPO Increase

Core Insights - Oracle Corporation is viewed as a promising stock with significant upside potential, but recent developments have led to a downgrade in its price target from $300 to $200 by DA Davidson, maintaining a Neutral rating on the shares [1][3] Financial Performance - In FQ1 2026, Oracle reported total revenue of $14.9 billion, reflecting an 11% increase year-over-year, driven by strong demand in the AI sector [3] - The company's Remaining Performance Obligations (RPO) reached an all-time high of $455 billion, marking a substantial 359% increase compared to the previous year [3] Customer Dependency - The increase in RPO was primarily attributed to a single customer, OpenAI, which raised concerns about Oracle's reliance on this customer for its growth metrics [1][3] - OpenAI's commitment of $300 billion initially made Oracle appear to secure a significant deal, but subsequent announcements from OpenAI indicated a broader strategy that may undermine Oracle's position [2][3] Market Position - Oracle is aggressively targeting the AI inferencing market, leveraging its status as the largest custodian of high-value private enterprise data [3] - Despite Oracle's potential, some analysts suggest that other AI stocks may offer greater upside potential with less associated risk [4]