Bernstein sees more upside potential and ranks Oracle as a “best investment idea” for investors looking to get into cloud deals. The firm rates the stock an Outperform and has a $175 price target, which would imply an upside of more than 11% from Wednesday's closing price. Bernstein's comments come after the stock has already seen a big surge this week. On Tuesday, Oracle surged more than 11% after better-than-expected first-quarter earnings, and is up 49% year-to-date. The company's performance this year is second only to Nvidia among mega-cap tech stocks. ORCL YTD Mountain Oracle YTD Analyst Mark Moerdler said in a Thursday note that Oracle's customer mix and workload quality — both of which offer protection from downside risks — are key to the comment. “Oracle offers a broad range of products that help meet the specialized requirements of some (perhaps most) of the market that are not served by the traditional approaches of its peers,” the analyst said, adding that the company's cloud infrastructure likely has options that “meet your needs.” “The opportunity set and differentiation that Oracle's products provide should not be underestimated,” he continued. Moadler expects Oracle's products and services to drive revenue growth. He noted Oracle's announcement that cloud revenue hit a $2.1 billion run rate, up from $2 billion last quarter. But he said this is “just the beginning.” Furthermore, the analyst sees an opportunity to exceed expectations as databases move to the cloud and leverage operational improvements to maintain or improve margins. Moreover, Moadler said Oracle's approach to security, particularly its move away from password use, is just the “tip of the iceberg.” “We've seen Microsoft quietly become the largest security software/cloud provider, and now we see Oracle offering compelling security capabilities/products,” he said. “Security vendors, beware: Oracle is coming.”
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