Selected stock price target news of the day - June 14, 2023

By Matthew Otto

 

Oracle Grows on revenue, beats expectations.

Oracle released its fiscal fourth-quarter results for the period ending May 31, 2023. The tech giant announced revenue of $13.8 billion, marking a 17% growth year-over-year or 18% in constant currency terms. This financial performance fell squarely within Oracle’s projected growth range, with non-GAAP profit surpassing Wall Street’s consensus at $1.67 per share.

The results are largely attributed to the company’s burgeoning cloud division, which experienced a whopping 54% growth in revenue. This exceeded analysts’ predictions, which had pegged the likely growth around 50%.

Over the full fiscal year, Oracle reached a milestone with an all-time high of $50 billion in revenue. This marks an 18% increase as reported or 22% in constant currency. Specific divisions of Oracle have performed notably well, with its cloud-infrastructure business seeing a 76% growth in revenue for the quarter, while cloud applications revenue went up 45%.

In recent months, Oracle has aligned with more than 30 AI development companies, which have committed to purchase over $2 billion of capacity in Oracle’s Gen 2 cloud. Among these partnerships, the company’s collaboration with AI software company Cohere stands out, offering customers the ability to build their own models while protecting their data.

Outlook is within Wall Street expectations

Looking forward, Oracle projects an 8% to 10% increase in revenues for the fiscal first quarter ending in August. The company anticipates a profit of $1.12 to $1.16 per share for the quarter, which aligns with Wall Street’s estimate of $1.14 per share.

Oracle CEO, Safra Catz, painted a rosy picture of fiscal 2024, predicting “unprecedented cloud demand.” Despite the increasingly higher base, Catz expects the growth rate of cloud demand to match or even exceed the rate witnessed in 2023.

The tech company remains steadfast in its previous forecast of achieving $65 billion in sales by 2026. The increasing demand for AI is seen as a significant growth factor in the company’s future.

Oracle’s consistent growth and positive future outlook have been met with enthusiasm from the market. The company’s shares have rallied over recent weeks, resulting in a market valuation that exceeds $300 billion.

Erica Schultz, an insider at Confluent, recently offloaded shares of the company. According to the transaction dated June 13, 2023, Schultz sold a significant portion of her Confluent holdings, amounting to a total of $1,808,500.00.

Wall Street Action

  • Morgan Stanley analyst Keith Weiss maintains an Equal-Weight, raising the price target from $90 to $105.
  • Goldman Sachs analyst Kash Rangan maintains a Neutral, lifting the price target from $75 to $120.
  • Evercore ISI Group analyst Kirk Materne maintains an In-Line, increasing the price target from $110 to $125.
  • JP Morgan analyst Mark Murphy maintains an Overweight, with a price target rise from $109 to $112.
  • DA Davidson analyst Gil Luria keeps a Neutral, pushing the price target up from $85 to $115.
  • TD Cowen analyst J. Derrick Wood maintains an Outperform, raising the price target from $117 to $137.
  • Stifel analyst Brad Reback keeps a Hold, increasing the price target from $84 to $120.
  • B of A Securities analyst Brad Sills maintains a Neutral, with the price target going up from $112 to $132.
  • Mizuho analyst Siti Panigrahi maintains a Buy, raising the price target from $116 to $150.
  • Citigroup analyst Tyler Radke keeps a Neutral, boosting the price target from $106 to $121.
  • Wolfe Research analyst Alex Zukin maintains an Outperform, raising the price target from $130 to $140.
  • Deutsche Bank analyst Brad Zelnick maintains a Buy, with a price target increase from $120 to $135.
  • Barclays analyst Raimo Lenschow keeps an Equal-Weight, raising the price target from $113 to $126.
  • Jefferies analyst Brent Thill maintains a Buy, boosting the price target from $125 to $135.
  • Bernstein analyst Mark Moerdler maintains an Outperform and raised the price target to $142 from $120.

Opinions on the stock forecast remain varied regardless of the last report.

Analyst Brent Bracelin (PIPER SANDLER) has the highest current performing score on ORCL with  12/15 (80%) price target fulfillment ratio. His price targets carry on average an $5.33 (8.65%) potential upside and are fulfilled within average of 233 days.

Confluent sees insider holding offload while WallStreet upgrades its outlook

Erica Schultz, an insider at Confluent, offloaded shares of the company. According to the transaction dated June 13, 2023, Schultz sold a significant portion of her Confluent holdings, amounting to a total of $1,808,500.

Confluent Director Jonathan Chadwick also sells $605,150 of his share in the firms

Wall Street Action

  • Guggenheim analyst Howard Ma downgraded from Buy to Neutral.
  • Wells Fargo analyst Michael Turrin maintains an Overweight rating and raised the price target from $35 to $41.
  • Mizuho analyst Gregg Moskowitz maintains a Buy rating and raised the price target from $28 to $40.
  • Barclays analyst Raimo Lenschow maintains an Overweight rating and raised the price target from $26 to $42.
  • Needham analyst Mike Cikos reiterated a Buy rating and maintains a $45 price target.
  • UBS analyst Karl Keirstead maintained a Neutral rating and raised the price target to $39, up from $24.
  • JP Morgan analyst Pinjalim Bora raised Confluent’s price target to $31.
  • TD Cowen analyst J. Derrick raised the Confluent price target to $40.
  • JMP Securities analyst Patrick Walravens raised the price target for Confluent to $41.

Analyst Raimo Lenschow (BARCLAYS) has currently the highest performing score on CFLT with 10/11 (90.91%) price target fulfillment ratio. His price targets carry on average an $2.52 (11.54%) potential upside and are fulfilled within average of 43 days.

 

Amazon Web Services Considering Using AMD’s New AI Chips

Advanced Micro Devices has announced yesterday that its highly anticipated GPU (graphics processing unit) for artificial intelligence, the MI300X, will start shipping to some customers later this year. This new development is seen as a significant challenge to Nvidia, which currently holds over 80% of the market share in AI chips.

The MI300X and its CDNA architecture are specially designed for large language models and other advanced AI models. The MI300X has a memory capacity of up to 192GB, significantly larger than Nvidia’s H100, which supports only 120GB of memory. This increased memory size allows the handling of larger AI models, potentially reducing the need for multiple GPUs.

AMD has also developed an Infinity Architecture that allows the combination of eight M1300X accelerators into one system, similar to solutions offered by Nvidia and Google. However, AMD may need to overcome developers’ preference for Nvidia chips, which have a well-developed software package called CUDA. AMD has stated it has its own software for its AI chips, known as ROCm.

CEO Lisa Su referred to AI as AMD’s “largest and most strategic long-term growth opportunity,” forecasting a rise in the data center AI accelerator market from $30 billion this year to over $150 billion by 2027. The move to ship MI300X later this year could potentially put pricing pressure on Nvidia’s GPUs, thereby driving down costs in generative AI applications.

Amazon might be the big ticket

Today, Amazon Web Services (AWS) was reported to be contemplating using new artificial intelligence chips from Advanced Micro Devices Inc (AMD), according to an AWS executive. However, a final decision has not yet been made.

AMD presented its AI strategy at an event where they are looking to challenge the dominance of Nvidia in the AI market. AMD CEO Lisa Su explained their approach to winning significant cloud computing customers by offering all the components needed to construct the kind of systems to power services similar to ChatGPT, but allowing customers to select what they need, using industry-standard connections.

While AWS hasn’t made any public commitment to use AMD’s new MI300 chips in its cloud services, Dave Brown, vice president of elastic compute cloud at Amazon, stated AWS is evaluating them.

Wall Street Action

 

  • Aaron Rakers, an analyst at Wells Fargo, keeps an Overweight rating, elevating the price target from $120 to $150.
  • Vijay Rakesh, an analyst at Mizuho, also upholds a Buy rating and escalates the price target from $90 to $140.
  • Blayne Curtis, an analyst at Barclays, sustains an Overweight rating, hiking the price target from $90 to $145.
  • Matt Bryson, an analyst at Wedbush, reaffirms an Outperform rating and preserves a $145 price target.
  • Ross Seymore, an analyst at Deutsche Bank, boosted the price target to $110.
  • Christian Schwab, an analyst at Craig-Hallum, upgraded the price target to $158.
  • Ambrish Srivastava, an analyst at BMO Capital, uplifted the price target to $150.

 

Analyst Christopher Danely (CITI)  has currently the highest performing score on AMD with  6/8 (75%) price target fulfillment ratio. His price targets carry on average an $-4.77 (-2.24%)

potential downside and are fulfilled within an average of ten days.

 

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