Oracle shares rose 4% on Wednesday as analysts at Deutsche Bank and HSBC defended the stock following a sharp pullback and mounting investor concerns around the cost and uncertainty of artificial intelligence infrastructure spending.

Deutsche Bank stated that despite anxiety over Oracle’s commitments tied to AI demand and its relationship with OpenAI, 「the bear case looks… bullish.」

Analyst Brad Zelnick argued that even if Oracle generated no incremental revenue from OpenAI, his team’s long-term scenario suggests only a modest hit relative to management targets for FY30, estimating 「a $4 reduction in EPS to $17 and a $10bn reduction in FCF to $31bn.」

Deutsche Bank added that at a share price of about $200, the company is 「getting little if any credit for its business with OpenAI.」

The bank also addressed concerns over Oracle’s long-term lease obligations tied to data center expansion.

While acknowledging the issue, it said 「we believe there is a good deal of flexibility/fungibility around these leases,」 and estimated that burdening Oracle with roughly half of expenses in a downside scenario would imply earnings of 「~$15 and FCF of ~$26bn.」

HSBC likewise maintained a positive stance, reiterating a Buy rating and a $382 target price on the stock.

The firm highlighted investor confusion following Oracle’s disclosure of more than $500 billion in remaining performance obligations, noting that markets have been 「filling in the blanks with little concrete information.」

HSBC noted that the company has guided to a 30-40 percent non-GAAP gross margin on its AI infrastructure business for FY30 and argued that combining lower-margin cloud with slower-growing software 「is not a flag of margin deterioration, it is math.」

HSBC concluded that Oracle is 「skilfully planning to meet these commitments」 and sees 「upside of 92.2%,」 maintaining a Buy rating.