The AI race took another geopolitical twist last past week, as the Trump Administration announced the formation of the $500 billion Project Stargate. Oracle Corporation (NYSE:ORCL) Executive Chairman Larry Ellison—among other major partners—was front-and-center at the White House for the unveiling of the public-private partnership.
Invest with Confidence:
- Follow TipRanks' Top Wall Street Analysts to uncover their success rate and average return.
- Join thousands of data-driven investors – Build your Smart Portfolio for personalized insights.
Under Project Stargate, Oracle, OpenAI, and Nvidia will work together to build up to 20 data centers over the next four years. Oracle shares jumped up by double digits in the days after the announcement, reflecting hopes that this consortium will indeed serve as quite the boon for the company.
One top investor known by the pseudonym JR Research agrees that this confidence is certainly well-founded.
“Oracle’s reported $7 billion equity stake in Stargate could elevate its brand profile and AI data center execution capabilities,” explains the 5-star investor, who sits in the top 1% of TipRanks’ stock pros.
JR further expands that Oracle’s participation in the project is a positive reflection on the capabilities of its cloud computing infrastructure. The partnership also demonstrates confidence among these major industry players regarding Oracle’s ability to provide the technological wherewithal needed to support this massive project.
“I believe the scale of the opportunity should elevate Oracle’s brand positioning in the highly competitive hyperscaler space, as it seeks to catch up with the leading trio” of Amazon, Microsoft, and Google Cloud, expounds JR Research.
And yet, the valuation of ORCL remains quite reasonable, explains JR Research. Noting that “the market hasn’t gone FOMO on ORCL,” the investor points out that ORCL’s Forward EBITDA multiple of 18.66x is less than that of both Microsoft (21.65x) and Salesforce (20.57x).
“I’m confident that Oracle’s improving long-term opportunity, potential market share gains, and favorable developments from its Stargate venture should help alleviate the extent of any subsequent decline,” asserts JR Research. The investor is therefore maintaining a Buy rating for ORCL. (To watch JR Research’s track record, click here)
A healthy contingent of Wall Street analysts seem to agree with JR Research. With 15 Buy, 11 Hold, and 1 Sell ratings, ORCL enjoys a consensus Moderate Buy rating. Its 12-month average price target of $192.88 would yield gains of ~5% in the coming year. (See ORCL stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
