By Moz Farooque ACCA
Publication Date: 2025-12-24 13:43:00
This article first appeared on GuruFocus.
oracle (NYSE:ORCL) could be sitting on much greater AI growth story than the market gives it credit for, and Wells Fargo believes the recent worries miss the point.
In a note to clients, analyst Michael Turrin expressed concerns about Oracle’s risk OpenAI are overrated. When he delves into Oracle’s remaining performance obligations, he sees that the long-term revenue is tied to its AI workloads. Wells Fargo estimates OpenAI-related revenue could reach about $10 billion in FY27, rise to $39 billion in FY28, rise to $65 billion in FY29, and approach $78 billion by FY30. Based on Oracle’s margins, this could see OpenAI contribute around 2530% of profits in FY28 to FY30.
Turrin also called the recent decline in Oracle shares exaggerated and argued that AI-driven cloud demand is still in its early stages and is increasing. As more companies increase AI usage, he believes Oracle is well-positioned to quietly gain market share in cloud infrastructure.
