Wells Fargo believes the current market pessimism surrounding AI investments is "overdone," suggesting Oracle is significantly undervalued and poised for a major revaluation.
On Monday (December 22), CNBC reported that Wells Fargo's latest analysis highlights Oracle's strong potential in AI cloud infrastructure, implying nearly 50% upside for its stock price.
This optimistic outlook comes amid heightened volatility in the tech sector and growing concerns about overvaluation and slowing growth among AI-driven companies. Wells Fargo emphasized that Oracle's exposure to the undervalued AI cloud business will be the key driver supporting its bullish case.
As of December 21, 2025, Oracle's stock closed around $190. Wells Fargo's updated target suggests a potential rise to $285.
The analysis notes that if AI adoption accelerates, the stock could see significant rebound potential—a stark contrast to the prevailing cautious sentiment in the market.
**Excessive AI Pessimism and Undervalued Cloud Assets** Wells Fargo's bullish thesis centers on Oracle's robust cloud infrastructure and AI integration, which it argues are overlooked by the market.
According to the CNBC-cited report, Oracle's recent expansion in AI data centers and strategic partnerships position it favorably against competitors. Analysts attribute the current AI sector pessimism to scrutiny over tech giants' high valuations, which obscures the actual growth potential of companies like Oracle.
Challenging this narrative, Wells Fargo contends that Oracle's proprietary database technology is gaining market share, with fundamentals stronger than market expectations. The report states:
Global AI investment is projected to reach $200 billion in 2025, and Oracle stands to benefit from its technological positioning—a fundamental improvement not yet fully reflected in its stock price.
Comments