Oracle Gains Wall Street Attention As Microsoft, Meta Fuel AI Infrastructure Boom

As artificial intelligence continues to reshape the tech landscape, major companies are ramping up investments to capitalize on this transformative trend.

Oracle (NYSE:ORCL) emerges as a significant player in the ongoing AI revolution, prompting analysts to reassess its financial prospects amidst a surge in AI-driven capital expenditures.

Bank of America Securities analyst Brad Sills maintained Oracle with a Neutral rating and raised the price forecast from $220 to $295 on Tuesday.

Sills raised his price forecast on Oracle, reflecting a 17% upside, based on growing optimism around the AI cycle, where Oracle is a key beneficiary.

He stated that recent second-quarter earnings reports across big tech, notably Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META), signal a ramping AI-driven capex cycle.

Also Read: Oracle’s AI Ambitions Take Flight After Record Cloud Growth: What Do Analysts Really Think?

Microsoft guided to first-quarter fiscal 2026 capex exceeding $30 billion—well above Sills’ estimate of $23.5 billion—citing strong cloud migration demand tied to AI. Meta raised its full-year capex guidance to $69 billion, surpassing its internal forecast, as it expands its data center and AI infrastructure.

Sills views these developments as strong demand signals within a sizable AI infrastructure market. In BofA’s Agentic AI Handbook, Sills estimated the total addressable market (TAM) for agentic AI-related services—based on displacement of human labor—at $155 billion, or roughly 8% additive to the existing software TAM.

While OpenAI services like ChatGPT drive much of the demand, Microsoft’s recent commentary points to rising AI infrastructure investments from labs, vendors, and enterprises—suggesting the next wave of adoption is underway, with Oracle among the potential beneficiaries.

Still, Sills maintained a Neutral rating on Oracle, citing valuation concerns and limited visibility into how significantly AI infrastructure demand will impact Oracle’s topline.

Oracle is trading 33 times forward earnings (or 2.0 times when adjusted for 17% growth) compared to the S&P 500 at 20 times/1.4 times. The new $295 price forecast reflects a higher multiple—40 times calendar 2026 earnings (2.4 times adjusted for 17% growth)—to account for potential upward revisions in capex and revenue estimates.

Sills projected fiscal 2026 sales of $66.98 billion and adjusted EPS of $6.77.

ORCL Price Action: Oracle stock is up 0.97% at $254.57 at publication on Tuesday.

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