Wedbush Initiates Oracle Outperform Rating – "$553B Backlog Makes It AI Infrastructure Key Player"

Wedbush Securities initiated coverage on Oracle with an Outperform rating and $225 price target. The firm highlighted Oracle's $553 billion backlog (+325% YoY) and 84% cloud infrastructure growth as evidence of an undervalued AI infrastructure play.

Justin·April 25, 2026·3 min read

AI Summary

Wedbush initiated Oracle at Outperform with a $225 target. The thesis: $553B backlog (+325% YoY) and 84% cloud infrastructure growth. Wedbush dismissed debt and negative FCF concerns as overstated given contract-driven investment. The stock trades at roughly half its 52-week high; analyst consensus target of $264 implies ~50% upside.

$225 price target with $553 billion backlog surging 325% YoY… Cloud infrastructure grows 84%

Wedbush Securities initiated coverage on Oracle (ORCL) with an Outperform (Buy) rating and $225 price target on January 24th (local time). The analyst team led by Dan Ives argued that Oracle is being repositioned as a core AI infrastructure provider but remains undervalued by the market.

Wedbush diagnosed that Oracle is successfully moving beyond its traditional image as a database company to build next-generation cloud infrastructure for large-scale AI workloads. Partnerships with OpenAI and NVIDIA, plus participation in the Stargate project, form the core pillars of this transformation. The firm also noted that Oracle Cloud Infrastructure (OCI) is optimally structured for large AI model training and inference thanks to its high-performance, low-latency architecture.

$553 Billion Backlog… 325% YoY Surge

The most striking figure in this report is the remaining performance obligations (RPO) backlog. Oracle's RPO reached $553 billion in Q3 FY2026, a 325% surge from the prior year period. The majority of this amount consists of contracts related to data center construction to accommodate AI servers.

Cloud infrastructure revenue during the same period grew 84% YoY to $4.89 billion. Multi-cloud database revenue surged 531%. Based on these metrics, Wedbush argued that Oracle's capital expenditures are driven by actual contracted demand rather than speculative investment. Oracle has already raised $30 billion for AI infrastructure buildout and is pursuing plans to raise a total of $45-50 billion in capital.

"Debt and Cash Flow Concerns Are Overblown"

The market's key concerns about Oracle center on surging capital expenditures and negative free cash flow. Non-current liabilities stand at approximately $124.7 billion, and the stock has been pushed down to about half its 52-week high ($345.72).

Wedbush countered that these concerns are overblown. The firm argued that $553 billion in contracted demand supports the spending, and innovative funding structures including customer co-investments and hardware leasing substantially mitigate investment risks.

Investors are focusing solely on near-term spending concerns while missing the long-term growth potential as the backlog converts to revenue.
Dan Ives, Wedbush Securities

Oracle's current stock price of approximately $176 shows a significant gap from the average analyst price target of $264. Mizuho and Guggenheim maintain $400 price targets respectively, while only RBC Capital presents a conservative outlook of $155-160.

InteliView Editorial | 2026.04.25