• Deutsche Bank reaffirms its Buy rating and $375 price target on Oracle, contending that recent stock weakness and AI capacity concerns are overblown.
  • Analyst Brad Zelnick's analysis suggests that even excluding all OpenAI-related revenue, Oracle's long-term earnings and cash flow outlook remains robust.
  • The firm argues the current share price implies little to no value for Oracle's AI business, presenting a compelling risk-reward profile.

Deutsche Bank has doubled down on its bullish stance for Oracle Corporation, reiterating a Buy rating and a $375 price target in a note to clients. The analysis, led by analyst Brad Zelnick, directly addresses mounting investor concerns about the company's AI infrastructure capacity and its financial exposure to OpenAI, suggesting the market's pessimism is misplaced.

Zelnick's detailed breakdown posits that even in a conservative scenario where all revenue tied to OpenAI is excluded from future projections, Oracle's fiscal year 2030 earnings per share would only decline from $21 to approximately $17. Similarly, free cash flow estimates would fall from $41 billion to around $31 billion. "Based on today’s roughly $200 share price, the market is giving Oracle little to no credit for its OpenAI business," the note stated, according to people familiar with the matter.

The report goes a step further, applying an additional layer of caution for potential costs associated with unused AI capacity. Even accounting for these potential lease burdens, the analysis projects FY30 EPS would remain near $15, with free cash flow around $26 billion. Deutsche Bank views these levels as still supportive of a strongly bullish long-term outlook, effectively framing the bear case as fundamentally positive.

This vote of confidence arrives as Oracle's underlying financials show significant momentum. The company reported fiscal year 2025 total revenues of $57.4 billion, an 8% year-over-year increase, with cloud services and license support revenue climbing 12% to $44 billion. More critically, the company's remaining performance obligations—a key indicator of future revenue—have ballooned, reaching $455 billion in Q1 FY26, which illustrates the rapid expansion of its contracted cloud business.

Oracle's management has consistently projected an acceleration in growth for FY26, specifically targeting cloud growth rates exceeding 40%. Efforts to reach Oracle for additional comment on the Deutsche Bank report were not immediately successful. The reiteration from Deutsche Bank underscores a belief that Oracle's massive sales backlog and strategic pivot to cloud and AI services provide a durable foundation for growth, even if the near-term monetization of its AI capacity faces headwinds.