Investing.com -- Piper Sandler upgraded Oracle (NYSE:ORCL) to Overweight and downgraded Workday (NASDAQ:WDAY) to Underweight in a note Thursday, citing major shifts in CIO spending priorities driven by artificial intelligence.

“Our latest CIO survey reinforced a bullish spending backdrop for AI infrastructure while elevating risks to the broader application category,” analysts wrote.

Oracle was highlighted as a key beneficiary of this trend, with Piper lifting its price target to $270 from $190. 

“CIOs planning a material increase in OCI spending shot up to 27% from 18%, 15%, and 4% in previous surveys,” the analysts noted. They also cited growing enterprise demand, which could “add another layer of growth to the outsized OpenAI-Stargate opportunity.”

Meanwhile, Workday was downgraded due to concerns about declining application software spending and potential pricing pressures. 

“Per employee pricing risk coupled with eroding appetite to invest materially in applications could further pressure growth at WDAY,” Piper wrote. 

The firm cut its price target for WDAY to $235 from $255, adding that Workday may be a “potential AI casualty on headcount drag,” with 52% of CIOs now expecting AI to reduce headcount, up from 39%.

Microsoft (NASDAQ:MSFT) and SAP were also singled out as strong performers in the current environment. Piper raised its Microsoft target to $600, citing Azure’s growing dominance, with “spending intentions surpassing 80% for the first time.” 

SAP’s spending intentions also rose sharply, leading Piper to raise its price target to €355, calling it “one of the few high-conviction application growth stocks to own.”

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