Happily for its shareholders, Oracle(NYSE: ORCL) has been on the receiving end of a slew of analyst price target increases in recent weeks. Approaching the high end of those new targets was the latest from storied researcher Jefferies, which now feels the tech stock has potential upside approaching 20%. Here's a glance at that prognosticator's take, and brief evaluation of his stance.
Maintaining a solid buy recommendation
The analyst, Brent Thill, bumped his Oracle price target $5 higher to $150 per share, implying a potential 16% increase on the stock's latest closing level. Given that, it should come as little surprise that Thill had, and maintained, a buy recommendation on the shares.
The Jefferies pundit was hardly alone in making such a move shortly after Oracle published its earnings for the third quarter of fiscal 2024. The tech company only edged past the analyst consensus for both revenue and adjusted profitability, but this meant a healthy 16% year-over-year improvement in the former metric, and a 7% increase for the latter.
Much of this success derived from Oracle Cloud Infrastructure (OCI), the company's set of cloud offerings. That should continue to propel growth, according to Thill, as it is well positioned to be "one of many beneficiaries in a multi-cloud world," as he wrote in a research note.
2 hot niches, 2 strong revenue streams
Over the years, Oracle's management has proven adept at identifying and exploiting the hottest niches in the tech world, and I see no sign of that talent fading away. It's assertively powered into the artificial intelligence (AI) segment, reporting along with those third-quarter results that demand for its Gen2 AI infrastructure offerings far outstrips supply.
The company should remain a player, at least for the foreseeable future. If anything, Thill's new price target looks like an underestimation.
Should you invest $1,000 in Oracle right now?
Before you buy stock in Oracle, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Oracle wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 18, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group and Oracle. The Motley Fool has a disclosure policy.
