Is Oracle Stock Really Capable of Surging to $400? Or is That a Pipe Dream?

By Joey Frenette Published Jan 3, 11:21AM EST

Quick Read

Oracle shares fell 45% from their peak despite finishing 2025 up 17%.
Growing concern centers on Oracle’s debt levels and heavy reliance on OpenAI as a single client. It might be overdone in 2026.
Mizuho and Jefferies maintain $400 price targets on Oracle despite recent volatility.

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Is Oracle Stock Really Capable of Surging to $400? Or is That a Pipe Dream? — © Justin Sullivan / Getty Images

Though it certainly doesn’t feel like it, Oracle (NASDAQ:ORCL | ORCL Price Prediction) shares finished 2025 with respectable, market-beating gains intact, up around 17%, topping the S&P 500 by close to a full percentage point. Undoubtedly, it was an eventful and turbulent year for the fast-rising AI data center play, which won the hearts of investors through the summer, only to break them in the fall that followed.

The sentiment surrounding AI spend has shifted violently, with indebted spenders taking on more of a hit, as the AI trade cooled down to end 2025. With the first trading day of January getting off to a choppy start, with shares of the Mag Seven showing signs of wobbliness, it feels like the first quarter of 2026 might follow a similar script as the fourth quarter of 2025. More volatility and increased selectiveness across the AI stocks might continue to be the dominant theme.

Oracle starts 2026 in a huge rut

For Oracle, which has shown signs of slowed negative momentum in recent weeks, I do think the cathartic 45% drop should have new investors feeling a bit better about the path forward, even though numerous uncertainties remain, especially regarding OpenAI and the cap-raising it’ll need to do to pay Oracle for its services in the coming years.

Had OpenAI been publicly traded, I’m sure the chart might have a good shot of resembling that of Oracle’s, especially as investors become more concerned about the financials and less about the transformative impact of the technology. If we learned anything from the internet boom of the 90s, it’s that profound, game-changing technology might not be able to pull in the profits fast enough to prevent a bubble bust. Ultimately, the internet boom did deliver, but it took a lot longer than many bubble chasers likely expected.

Either way, AI is already being embraced by a broad basket of firms. And in this new year, there’s a serious opportunity to prove AI spend can yield big cash returns, perhaps in the form of outsized profits for select firms that have the right AI strategy. In a prior piece, I highlighted Apple (NASDAQ:AAPL) as a firm playing it slow and steady that could rise as a top AI monetizer.

The OpenAI exposure might be a good thing

On the flip side, we have Oracle, an AI-spending heavyweight that seems willing to risk taking on significant debt while leaning more heavily on a single client in OpenAI.

Depending too much on a single firm’s ability to pay is seldom a good idea. But when it comes to OpenAI and Sam Altman, as well as the once-in-a-generation AI monetization opportunity to be had, I think Oracle is right to take a massive swing for the fences. Indeed, it’s not too hard to envision how Oracle’s big bet on the AI data center could go wrong.

And concerns over debt and OpenAI’s future are bound to continue acting as an overhang in the coming weeks and months. That said, I think Oracle’s path to $400 is set, as the Oracle Cloud Infrastructure (OCI) looks to excite again, perhaps at a later quarter, once the latest RPO numbers come out.

Sure, RPOs might mean less to investors worried about an AI bubble and a potential disastrous scenario for OpenAI should it struggle to monetize in the coming year. That said, I think it’s unwise to bet against Larry Ellison and Sam Altman. If GPT-6, which will be more personalized, can impress as Gemini 3.0 did, perhaps it’s time to get more hyped about OpenAI again.

More than one Wall Street pro sees Oracle stock climbing to $400

With Mizuho and Jefferies, two highly respected firms, pointing to a $400 price target on Oracle shares, I do think it’s time to take a contrarian view of Oracle.

At the end of the day, OpenAI and other frontier AI innovators can’t get enough AI compute. And while scaling up might not yield massive incremental gains (GPT-5 over GPT-4 hasn’t been as big a leap as GPT-4 over GPT-3), it seems unlikely that firms would want to surrender even the modest advantage as the AI wars become closer and higher in stakes.

Given this, I’d say Oracle remains in the right spot, with big bets on the right horse (OpenAI) that might win the race to AGI. If this turns out to be the case, Oracle stock might be the high-risk/high-reward play to go with.

About the Author Joey Frenette →

Joey is a 24/7 Wall St. contributor and seasoned investment writer whose work can also be found in publications such as The Motley Fool and TipRanks. Holding a B.A.Sc in Computer Engineering from the University of British Columbia (UBC), Joey has leveraged his technical background to provide insightful stock analyses to readers.

Joey's investment philosophy is heavily influenced by Warren Buffett's value investing principles. As a dedicated Buffett disciple, Joey is committed to unearthing value in the tech sector and beyond.