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Wells Fargo Bets on Oracle: AI Fears Undervalued Software Giant
22 Dec, 2025
Summary
- Oracle shares dropped 42% from September highs due to AI trade concerns.
- Wells Fargo maintains an overweight rating with a $280 price target.
- The TikTok deal and OpenAI's funding are seen as positive catalysts.
Wells Fargo has reaffirmed its overweight rating on Oracle, asserting that recent market apprehension over the AI trade has unfairly depressed the software company's valuation. The bank's $280 price target implies a substantial 46% increase from recent trading levels.
Oracle's stock experienced a significant downturn, falling 42% from its yearly high in September. Analyst Michael Turrin noted that near-term sentiment has turned increasingly bearish, citing challenges within the AI narrative and competitive pressures on AI leaders. Investors have expressed concerns regarding Oracle's exposure to OpenAI, the long-term viability of its commitments, and execution capabilities.
Despite these concerns, Turrin highlighted that recent news has begun to improve Oracle's outlook. Increased investor confidence stems from the anticipated closing of the TikTok U.S. business deal on January 22, and OpenAI's significant $100 billion funding round. Bulls on Oracle point to the current pullback as overdone, the potential for market share gains in cloud infrastructure, and the early stage of AI development.
