Wells Fargo unexpectedly goes bullish on Oracle amid Wall Street scapegoating

Wells Fargo is betting big on Oracle, even as most of Wall Street keeps treating the stock like a punching bag. On Wednesday, the bank’s analyst Michael Turrin initiated coverage with an “overweight” rating, dropping a $280 price target on the stock, which is a 39% surge from where it trades right now.

Oracle’s stock is up 21% this year, but has been slammed nearly 29% this quarter alone, because investors are losing patience with anything that still looks expensive.

But Fargo’s Michael believes Oracle’s just warming up in what he calls the AI super-cycle, and he’s pointing to $500 billion worth of deals already on the books to back that up. This isn’t some vague pitch either.

Oracle’s already tied into major clients like OpenAI, Meta, TikTok, and xAI, locking in a frontline position in enterprise-scale AI infrastructure. And right now the stock is sitting 42% below its peak, trading at about 25 times earnings projected for fiscal 2027.

Oracle Cloud fights for market share while others stall out

Michael predicted that Oracle Cloud Infrastructure will hit 16% of global market share by 2029, up from just 5% in 2025.

If that happens, it puts Oracle toe-to-toe with the third-largest cloud provider by size, basically putting it in the same conversation as Amazon, Microsoft, and Google.

Right now, the company holds the biggest cloud backlog in the industry, with a $455 billion base, and a pro forma estimate north of $500 billion. Microsoft? Their last reported number sat at $392 billion.

Michael’s also highlighting upside potential in a $300 billion cloud computing contract, and says there’s even more growth ahead from Oracle’s existing $75 billion AI lab commitments. ORCL rallied by 2% yesterday.

AI trades cool off while Oracle keeps collecting receipts

Outside of Oracle, the broader tech sector looks shaky as hell. The S&P 500 is flirting with record highs again, but the comeback isn’t being led by the usual suspects. Nvidia, Microsoft, and the rest of the Magnificent Seven are taking hits. The Information Technology index has dropped 4.2% since October 28, and some of those former tech stars are dragging down the whole category.

Meanwhile, names like Eli Lilly, Cardinal Health, and Biogen are suddenly running the show. Investors clearly want to be in the market, but not necessarily in tech.

This all comes as nerves grow around whether these AI mega-bets will actually deliver profits. The sector’s still carrying a forward P/E of 28, one of the highest readings in two decades.

Lori Calvasina from RBC Capital Markets said institutional clients are expressing real concerns about overconcentration in a handful of names, and that a rotation away from tech could be brewing.

But she also noted that companies still pouring cash into data center infrastructure are seeing strong earnings growth, meaning this rotation might have limits unless other sectors start outperforming on the bottom line.