Oracle’s stock could surge 80%, says this analyst who predicts a major rebound

Jefferies analyst Brent Thill reiterates a $400 price target on Oracle, arguing the stock—down more than 30% from its October high and trading near $222.85—could rally roughly 80% as the selloff overstates concentration and leverage risks. He notes OpenAI accounts for 58% of Oracle’s backlog but that excluding future OpenAI work Oracle still holds $220 billion of performance obligations (a 60% sequential increase), while a modular capex model limits upfront data‑center spending; with net debt/EBITDA at about 2.5x (below a 3.0x peak) and profitable applications and database franchises supporting margins, Thill sees an attractive risk/reward and room to fund AI investments.

Analysis

Jefferies analyst Brent Thill reiterated a $400 price target on Oracle (ORCL) while the stock trades around $222.85, implying roughly 80% upside from the recent close and marking a decline of more than 30% from the October high of $328.33. Thill characterizes the selloff as overblown, noting the company has lost $307 billion of market capitalization—an amount he compares to the cited $300 billion OpenAI contract—and argues that market moves have reduced the embedded OpenAI risk in the equity.

Thill highlights that OpenAI represents 58% of Oracle’s backlog versus roughly 39% or more for Microsoft and 16% for Amazon, but notes that excluding future OpenAI work Oracle still holds $220 billion of performance obligations, a 60% sequential increase on that metric. He frames backlog depth and the modular capex approach as key mitigants to concentration and cash-intensity concerns.

On leverage and margins, Thill points to a net debt/EBITDA ratio of about 2.5x, below the 3.0x fiscal‑2023 peak, and argues Oracle can rely on its higher‑margin applications and database businesses to fund increased capital spending; he retains a buy rating. The thesis hinges on continued backlog conversion, contained capex commitments via the modular model, and stable leverage trends.

Key Decisions for Investors

• Consider accumulating ORCL on weakness given Jefferies' $400 target and the roughly 80% implied upside, while sizing positions to reflect execution and concentration risk
• Monitor OpenAI exposure closely by tracking the percentage of backlog tied to OpenAI and the pace of performance obligation recognition, and tighten risk limits if that concentration or backlog declines materially
• Watch net debt/EBITDA and disclosures on capex/data center commitments—if leverage edges back toward or above 3.0x or Oracle abandons its modular capex approach, consider hedging or reducing exposure