Jefferies has reaffirmed Oracle’s ‘Buy’ rating with a $400 price target, citing strong potential from AI-driven data center expansion and TikTok USDS partnership, despite investor concerns over execution risks and financial stability.
New York-headquartered investment firm Jefferies has named Oracle Corp. a top pick, highlighting the company’s potential to benefit from surging demand for AI infrastructure. The firm maintained its ‘Buy’ rating and $400 price target, suggesting a possible 105% upside from the stock’s recent closing price. Oracle is aggressively expanding its global data center footprint to meet growing AI compute requirements, a move seen as central to its strategy of converting a $523 billion backlog into revenue.
Jefferies said that if Oracle successfully executes its expansion, it could emerge as a key provider of AI workloads across hybrid and multi-cloud environments. While some investors remain cautious about the company’s ability to fund rapid growth without straining finances, Jefferies believes the risk/reward ratio remains attractive, especially following a recent stock pullback.
Financial performance and strategic deals
In its second-quarter fiscal 2026, Oracle reported $16.1 billion in revenue, slightly below analyst expectations, though its earnings exceeded forecasts. The stock faced temporary pressure after reports suggested that funding partner Blue Owl Capital had withdrawn from a $10 billion AI data center investment—claims later denied by Oracle.
The company’s role in managing TikTok’s U.S. operations through the TikTok USDS Joint Venture, along with partners Silver Lake and MGX, is seen as a key growth catalyst. Over the past 12 months, Oracle shares have risen more than 17%, reflecting investor optimism around its AI-focused initiatives and strategic partnerships.
