Wall Street backs Oracle despite stock dip, betting on AI and Japan cloud expansion

Wall Street is keeping its bets on Oracle even after the company’s stock dipped following its announcement of a major partnership with SoftBank in Japan, according to Baird.

The investment firm initiated coverage of the tech giant with an “outperform” rating and set a $365 price target, a figure that signals a possible 27% rise from the company’s Wednesday close.

Analyst Rob Oliver wrote that Oracle is well placed in the artificial intelligence race. “We view ORCL as very well positioned to benefit from the accelerating spend on AI infrastructure, and the convergence of AI, data and use-cases that will emerge from the move from training to inference,” he said.

Rob also pointed out that Oracle’s reach goes beyond AI. The company’s ecosystem of applications, data platforms, and networking tools has expanded to cover a broad computing environment.

Rob described how the “combination of resources it delivers (scaled infrastructure, database, networking, and applications) creates a virtuous circle that we believe can support a premium valuation and propel shares beyond the current infrastructure scarcity trade.”

He added that Oracle’s revenue could climb more than 20% as business keeps moving to the cloud. “Core drivers of SaaS Applications and Infrastructure spending should support multiple years of above-average growth,” Rob said.

Operating margins have held at 40 to 45%, even as the company spends more aggressively. So far this year, Oracle shares are up 73%, and 33 of 44 analysts tracked by LSEG rate the stock a buy or strong buy.

Oracle teams with SoftBank to launch sovereign cloud in Japan

Meanwhile, Oracle and SoftBank are working together to provide sovereign cloud and AI services in Japan, a market where demand for secure data handling is growing quickly. SoftBank is preparing to roll out its Cloud PF Type A, a package of its own cloud and AI tools built on Oracle Alloy, aimed at organizations across the country.

The company said the services will launch in stages and will play a role in supporting Japan’s digital economy.

Japan’s push for secure and sovereign data management comes at a time when digitalization is rising and data volumes are soaring. By using Oracle Alloy, SoftBank customers will gain access to more than 200 Oracle Cloud Infrastructure (OCI) AI and cloud services, all based in Japanese data centers.

Hayato Sakurai, executive vice president at SoftBank, said:

“By integrating advanced technologies such as generative AI and high-performance GPUs, we will continue to address the diverse needs of our customers, empowering them to innovate, stay competitive, and drive Japan’s digital transformation.”

SoftBank is also reinforcing its systems with services designed to secure business operations across eastern and western Japan, including steps to support long-distance redundancy and network resilience.

To allegedly protect data and credentials even more, SoftBank is blending OCI Key Management Services with its own encryption system. On the connectivity side, its OnePort multicloud service and SmartVPN will give safe, private access to several cloud networks.

The Japanese giant also confirmed it will offer support for enterprises and municipalities through Managed Service Provider (MSP) services.

SoftBank confirmed that it will deploy Oracle Alloy to create sovereign cloud infrastructure in both its eastern and western Japan data centers. The rollout will begin with the eastern site in April 2026, followed by the western location in October 2026.

The Cloud PF Type A system will also support GPU environments and build cloud infrastructure capable of high-speed computation and generative AI workloads, a step seen as crucial for the country’s focus on sovereignty in AI.

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