Oracle Corp (NYSE:ORCL, XETRA:ORC) has seen its shares slide 41% from mid-September 2025 highs, reflecting investor unease over the tech giant’s outlook and broader skepticism around OpenAI’s growth, according to UBS.
Despite the sell-off, the bank maintains a Buy rating on Oracle, citing potential revenue acceleration and a rebound in the AI narrative in 1H26.
UBS analysts highlight that confidence in Oracle could return if the company successfully ramps its Abilene data center, maintains lender support for its AI build-out, and introduces more transparent, capital-light financing options.
“While Oracle’s near-term performance is tied to broader OpenAI sentiment, there are several plausible paths for an OpenAI narrative reversal in 1H26,” UBS said. “This gives us confidence to remain positive on Oracle and other AI-exposed names.”
The correction in Oracle shares was not company-specific, UBS said, but part of a broader decline in AI-linked tech stocks amid investor concerns that OpenAI may struggle to meet its ambitious growth targets, which include a projected $200 billion in revenue by 2030. Factors driving caution include slowing ChatGPT user growth, competition from Google Gemini, and questions over OpenAI’s ability to fund its expansion without putting strain on partners like Oracle and Microsoft.
UBS sees several potential catalysts that could restore confidence in OpenAI—and by extension, Oracle and other exposed tech stocks—in 2026. OpenAI capital raises are already underway, reportedly targeting $100 billion at an $830 billion valuation. Additionally, ChatGPT usage metrics have improved, particularly in weekly active users. The release of GPT-6, expected in the first quarter, may potentially drive a step-change in AI performance, analysts believe. What’s more, OpenAI now deriving around 40% of revenues from enterprise customers, alongside plans for advertising and better free-to-paid conversion rates.
Developments from xAI and Oracle’s partnerships, including potential Grok 5 releases, which could bolster compute demand and backlogs.
UBS also noted that enterprise AI adoption remains early-stage, with just 17% of surveyed organizations at scale, but the trend is upward. OpenAI remains the dominant AI provider to enterprises, ahead of rivals such as Google Gemini.
From a valuation perspective, Oracle trades at 29x CY26 EPS and 11x FY30 EPS, which UBS considers reasonable given projected 32% EPS CAGR through FY30. The bank trimmed its price target from $325 to $280, citing both OpenAI concentration risk and execution uncertainty.
“Our bottom line is that this ‘OpenAI narrative reversal’ has a reasonable enough chance of playing out that we’re biased to remaining positive on Oracle and other OpenAI-exposed stocks in 2026,” UBS wrote.
Shares of Oracle traded lower on Monday at around $193.24.