Shares of Oracle have experienced fluctuations due to recent news on artificial intelligence, but this may not be the right reaction. While shares were down nearly 3% from the previous day’s highs, the S&P 500 Index and Dow Jones Industrial Average showed minimal movement on Wednesday. Oracle’s shares initially rose after announcements that the Foundry platform from Palantir would be available on Oracle’s cloud-based AI infrastructure, indicating increased AI-based business for Oracle.
However, news that Elon Musk’s xAI will handle some computing for AI in-house caused a decline in Oracle’s stock. This highlights that the AI business is thriving, but there is a shortage of AI processing power to meet the growing demand. xAI utilizes Oracle’s AI infrastructure and Jefferies Analyst Brent Thill believes that Oracle is well-positioned to benefit from the increased demand for AI services.
Thill rates Oracle shares as a Buy with a price target of $150, projecting that sales will reach $65 billion by fiscal 2026. As AI computing continues to grow, more companies will train AI models with their private data to improve operations and enhance customer experiences. This trend will lead to further business opportunities for Oracle and other companies in the industry.
The competition in AI computing is still in its early stages, with companies like Nvidia benefiting from the widespread adoption of AI infrastructure. Nvidia’s stock has seen significant growth over the past five years due to its strong position in supplying chips for AI processing. Overall, the recent news around Oracle, Palantir, and xAI demonstrates the momentum in the AI industry and the potential for further growth.
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https://www.barrons.com/amp/articles/oracle-stock-price-palantir-ai-508627f1