Oracle (ORCL) has been under immense pressure in recent weeks after its Q2 earnings confirmed the company’s aggressive AI investments aren’t immediately translating into bottom-line strength.
At the time of writing, ORCL shares are down some 40% versus their September high.
But Michael Turrin – a senior Wells Fargo analyst – continues to recommend owning them heading into 2026.
In fact, Turrin believes Oracle stock could return as much as 50% in the coming year.
On Monday, he maintained an “overweight” rating on the AI infrastructure name with a price target of $280.
Oracle stock is seen as undervalued at current levels
Investors have been concerned about Oracle’s excessive exposure to OpenAI – and for good reason, too.
Within the next two to three years, the ChatGPT company will be accounting for up to 30% of its earnings, according to the latest Wells Fargo estimate.
However, the firm’s analyst, Michael Turrin, believes these risks are more than priced into ORCL shares at current levels.
According to him, the recent pullback has actually created a compelling opportunity for long-term investors to initiate or expand a position in Oracle at a deep discount.
Note that the multinational is currently going for less than 10x sales – an infinitely more attractive multiple than some of the other best-of-breed AI stocks.
What could drive ORCL shares higher in 2026
Michael Turrin remains constructive on Oracle shares also because the legacy technology company has reportedly been picked to run TikTok in the US.
Additionally, there have been reports that OpenAI is considering raising $100 billion, which may accelerate ORCL’s cloud revenue since it’s a key infrastructure provider for the startup’s workloads.
Simply put, Turrin sees bubble concerns as somewhat overblown since AI is “still in its very early innings.”
In his research note, the senior analyst told clients that Oracle will grow its market share in cloud IaaS next year, which will drive its stock back toward recent highs in 2026.
A 1.03% dividend yield makes up for an additional reason to own ORCL for the long term.
Oracle’s near-term to remain somewhat volatile
Investors should note, however, that the near-term may still remain volatile for ORCL stock, given its technicals currently don’t favour a meaningful push higher – at least not in the next few weeks.
At the time of writing, Oracle is trading decisively below its major moving averages (MAs) with a long-term relative strength index (RSI) at about 48, signalling the downward momentum isn’t out of juice just yet.
That said, options traders continue to believe in an eventual breakout in this AI stock.
According to Barchart, derivatives contracts expiring March 30 suggest ORCL will be trading near $230 over the next three months.
In short, beyond near-term volatility, discounted valuation and AI exposure could fuel a powerful rebound in Oracle next year.
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