Guggenheim raised its target price on Oracle stock to the highest level on Wall Street

Guggenheim raised the target price of cloud giant and software developer Oracle: the new target turned out to be the highest for the securities. The company is on the threshold of a period of strong growth in revenue and operating profit, the analyst believes. Active development of artificial intelligence, with which the company has associated itself, may become the drivers of growth.

Analyst John DiFucci raised his target price on Oracle shares by $30 to $250, which implies a 20% increase from the closing level on Tuesday, June 17, CNBC reported. DiFucci's target was the highest on Wall Street for Oracle stock, the network noted, citing LSEG data. DiFucci also reiterated a buy advice (Buy rating) and called Oracle one of the «best ideas» to invest in.

«We believe Oracle is on the cusp of a dramatic shift in the narrative that the company has been marching toward through decades of technology innovation. While the timing of new orders and capacity connections is less clear, we believe revenue is likely to accelerate markedly as early as fiscal 2026 and 2027, with operating income (and earnings per share) to follow,» DiFucci wrote in a note to clients Tuesday.

The analyst updated the target after Guggenheim held a day of virtual meetings with Ken Bond, Oracle's senior vice president of investor relations, CNBC writes. Afterward, DiFucci said the company's fiscal 2029 revenue target of $104 billion is too low. He said the company's current position reminds him of the early 2000s, when its developments helped the stock rise for an entire decade.

Oracle shares are up 75 percent from their April low, including posting their best two-day gain since 2001 on June 13-14 - following its reporting, wrote Bloomberg. The company then gave a revenue forecast that analysts called «stunning.» 

Investors began buying up securities in hopes that Oracle would turn from a conservative software maker into a trendy cloud player able to capitalize on the hype around artificial intelligence, wrote Bloomberg. As a result, the company's market value rose by $116 billion in just one week, the agency noted.

Analysts surveyed by Bloomberg agreed that Oracle is embarking on a new round of growth thanks to the active development of AI: for the first time in a long time, the company has a real driver for revenue and profit acceleration. For example, Stephen Bursey, head of technology research at HSBC, noted that the company has the potential for strong double-digit revenue growth instead of the previous modest 3-5% annual growth.

Shares of Oracle rose more than 3% in trading on June 18. The stock is up 28% since the beginning of the year: it's on track for its sixth year in the plus side out of the last seven.

Most analysts who follow the stock remain optimistic about the securities: 26 of 41 recommend buying, while the remaining 15 advise holding the securities in the portfolio, CNBC noted, citing LSEG data.