By Nate Wolf

Despite being one of the longest-standing names in tech, Oracle has performed like a hype-fueled growth stock this year, rising 41%.

Shares of the software company got another bull this week, as Wall Street firm Piper Sandler lifted his rating on the stock to the equivalent of Buy on the back of strong demand for artificial intelligence and cloud infrastructure.

Analyst Brent Bracelin upgraded Oracle to Overweight from Neutral and increased his price target to $270 from $190. Oracle shares were trading roughly flat at around $235.39 in Thursday trading.

Companies are shifting spending toward AI and cloud infrastructure and deprioritizing software applications for the first time since the launch of ChatGPT opened the AI floodgates in 2022, Piper Sandler found, with Oracle among the main beneficiaries.

The company's $500 billion Stargate AI venture with SoftBank and OpenAI that is focused on building AI infrastructure in the U.S. has grabbed headlines. But growing demand for Oracle's Cloud Infrastructure offering, or OCI, could also spur growth, Bracelin said.

In Piper Sandler's July survey of information technology decision makers at 70 North American companies, 85% of respondents reported plans to increase their IT budgets in 2025, and 93% said they would boost spending on AI infrastructure.

That aggressive spending should help all major infrastructure platforms, Piper Sandler noted, but OCI was a standout. The share of IT decision makers expecting to increase spending on OCI hit 27% in July, up from 18% in December 2024 and 4% in December 2023.

The data indicates growing appetite from enterprise clients on top of the existing Stargate agreement, Bracelin argued.

Oracle, it should be said, has been bullish about its growth opportunities in public statements. The company said it expects its backlog of unrealized revenue to climb by 100% this year, with growth in cloud infrastructure forecast at 70%. Neither figure includes contributions from Stargate.

"Oracle will be the No. 1 cloud database company. Oracle will be the number one cloud applications company. And Oracle will be the number one builder and operator of cloud infrastructure data centers," Chairman Larry Ellison said on a conference call in mid-June.

Bold predictions aside, Oracle's competitors are also primed to share some of the IT spending spoils, Piper Sandler noted.

Microsoft Azure was another standout from the July survey, with the share of companies planning to spend more on cloud infrastructure through Azure jumping to 30% from 24% in December. Together with Amazon Web Services and Google Cloud Platform, Oracle and Microsoft make up the so-called Big 4 of the infrastructure-as-a-service category.

On top of his Oracle upgrade, Bracelin reiterated an Overweight rating for Microsoft and raised his price target to $600 from $475.

Write to Nate Wolf at nate.wolf@barrons.com

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July 10, 2025 11:01 ET (15:01 GMT)

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