By Nauman khan
Publication Date: 2025-11-27 12:15:00
This article first appeared on GuruFocus.
Deutsche Bank says investor is lobbying against Oracle (NYSE:ORCL), driven by heavy AI spending and leasing commitments, could actually signal hidden upside potential for the stock, analyst Brad Zelnick wrote in a note to clients.
Zelnick Models A scenario that reduces consensus EPS by about $4 to about $17 and free cash flow by about $10 billion to nearly $31 billion, assuming Oracle’s forecast excludes OpenAI-related activity. Discounted to present value, he argues that these conservative assumptions suggest that the market is not fully acknowledging Oracle’s AI lag at today’s share price of around $200.
The analyst, who maintains a Buy rating and a $375 price target, warned that leasing costs could weigh on results in a downside event, reducing earnings per share to about $15 and FCF to nearly $26 billion, but said those commitments were flexible and could limit the damage to the company.
Zelnick added that Oracle’s current valuation is almost 27 times consensus…
