Jefferies’ $400 Oracle (ORCL) Target Reflects Confidence in AI Infrastructure

Core Viewpoint - Oracle Corporation (NYSE:ORCL) is recognized as a strong investment opportunity in the software infrastructure sector, particularly due to its positioning in AI infrastructure and a significant backlog of $523 billion that needs to be converted into revenue [1][2]. Group 1: Analyst Ratings and Price Targets - Jefferies has reaffirmed a Buy rating on Oracle with a price target of $400, highlighting the company's strategic focus on AI infrastructure [1]. - UBS has reduced its price target for Oracle from $325 to $280 but maintains a Buy rating, suggesting that the recent share price decline has already accounted for various risks [4]. Group 2: Financial Metrics and Valuation - Jefferies believes Oracle's current valuation is attractive, with a derived price target based on a 19x EV/FY 2030 EPS estimate of $21, indicating significant upside potential compared to its current valuation multiple of 16x EV/CY27 EBIT [3]. - The company is under pressure to accelerate its data center buildout to meet increasing AI compute demand, which is critical for converting its substantial backlog into revenue [2]. Group 3: Company Overview - Oracle offers a comprehensive range of database and cloud computing software and hardware, including databases, relational servers, application development tools, and enterprise business applications [5].