Shares of Oracle (ORCL) jumped about 10% on Monday after D.A. Davidson upgraded its rating to Buy from Neutral while maintaining its $180 price target on the stock.
Analyst led by Gil Luria said that “a revamped OpenAI (OPENAI) will return to its position as Google’s (GOOG) (GOOGL) top challenger and with a fresh stack of capital be able to live up to its obligations this year, including to Oracle.”
The analysts noted that OpenAI’s behavior led to underperformance in shares of Nvidia (NVDA), Microsoft (MSFT), CoreWeave (CRWV) and especially Oracle in recent months, Bloomberg News reported.
The analysts said that OpenAI has started focusing on its core frontier model and ChatGPT, while de-emphasizing some marginals initiatives. “The company seems to have realized that it needs to align with “NVDA, MSFT and AMZN, instead of trying to compete with them,” the analysts added.
Luria and his team said they expect that as investors go back to seeing OpenAI as a winner, the public companies in its orbit could re-rate significantly.
Separately, Oracle said its cloud infrastructure business in India has doubled over the past two years, Indian media outlet BW Businessworld reported.
“We are seeing tremendous momentum in India for Oracle Cloud Infrastructure (OCI) as more organizations across industries choose OCI to power their most mission-critical workloads,” said Kapil Makhija, vice president of Technology Cloud at Oracle India. “OCI business has doubled in India over the past two years.”
Oracle did not immediately respond to a request for comment from Seeking Alpha.