Information technology company Oracle (ORCL) is reportedly in talks to take a minor stake in TikTok’s U.S. operations. This would have the company provide security to the service and could allow it to continue operations in the U.S.
This deal would leave TikTok under the control of parent company ByteDance’s U.S. division, but wouldn’t provide the Chinese company a backdoor to user data. This could alleviate the concerns raised by lawmakers and judges that have TikTok heading for a ban in April. One thing to note is that ByteDance would reportedly require control of the algorithm used for TikTok even after Oracle’s investment.
Will Oracle’s Proposal Be Enough to Save TikTok?
Oracle’s attempt to keep TikTok from being banned in the U.S. will likely see support from President Donald Trump. He delayed the ban of the social media app when he took office earlier this year. That followed former President Joe Biden signing a law to ban the app unless it sold its U.S. operations, which was upheld in court.
Even if Oracle’s proposal isn’t enough to save TikTok, that doesn’t mean the app will be banned. There are reportedly several other companies that are interested in acquiring the short-form video-sharing service. The real problem comes from China, which is reluctant to allow ByteDance to sell TikTok to a U.S. company. If those troubles aren’t addressed, the app could disappear after President Trump’s delay runs its course on April 5.
Is ORCL Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Oracle is Moderate Buy based on 13 Buy and 12 Hold ratings over the last three months. With that comes an average price target of $179.95, a high of $220, and a low of $135. This represents a potential 19.39% upside for ORCL stock.
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