Why is Oracle the best-performing stock today?

Oracle is flying with Aladdin on his mat today. The stock has rallied 13%, which makes it the biggest gainer on the day. That comes right after Amazon said it’s going to throw $200 billion into data centers, chips, and hardware this year.

That’s helped Oracle break out. It’s also the second week in a row that the stock has gone up. Still, even with this rally, Oracle is down around 50% from its highs in September.

The AI money is pouring in from every angle. Companies are spending like crazy. That includes Amazon, Meta, Alphabet, and Microsoft, which together are planning to put $650 billion into AI tools.

Some traders now think a slice of that spending might actually go to software names like Oracle. The stock is reacting hard today, but there’s a lot more going on behind the scenes.

Analysts disagree on Oracle’s future after debt program and AI bets

One reason Oracle is running today is that DA Davidson upgraded it to Buy. They gave it a new price target of $180, up from Neutral. The analysts said they believe a “revamped OpenAI” will come back stronger and keep pushing Google in AI.

They also said OpenAI now has enough money to meet its side of the deal with Oracle. That, in their view, clears Oracle’s biggest risk.

Gil, the analyst at Davidson, wrote, “Software isn’t dead. We believe companies will continue to pay for Oracle’s products and that they will not be vibe coded away.” He thinks software demand will stay steady, even in a messy market.

But not everyone’s feeling that bullish. Melius Research actually downgraded Oracle to Hold and kept a lower target at $160. While they say they respect Larry El for going bold here, they also say Oracle is sitting on a heavy load of debt and equity.

And they raised a serious question: “What should a stock sell for with no free cash flow until the 2030s?” Melius thinks Oracle should be priced more like an infrastructure business than a software firm.

Bernstein is still on the optimistic side but even they cut their price target to $313 from $339. They still rate the stock Outperform, though. Bernstein pointed to the $45 billion to $50 billion debt and equity program Oracle announced last Monday. That’s how they’re going to fund the huge AI data center build they promised last year. Bernstein said this funding will likely carry Oracle through fiscal year 2028.

Still, the entire software sector is under pressure. The iShares Expanded Tech-Software ETF has dropped 28% from its highs in recent weeks. Traders are worried AI might actually cut into demand for traditional software. But some are betting the money from Big Tech’s AI boom will still flow into Oracle and others with cloud infrastructure.

Justin, an analyst at Bank of America, said cloud firms are facing tough macro risks, which could lead to stock volatility. But he also said, “Management teams seem confident in their ability to forecast demand, and that capacity will be fully utilized in 2026.”

And while cloud growth at Amazon and Alphabet was strong, David at UBS said their capex guidance came in way above what traders expected, and that’s what the market reacted to. But for Oracle, the cash pouring into AI infrastructure may finally be landing in its lap.