Tuesday proved a winner for tech company Oracle (NASDAQ:ORCL), as it was up around 3.5% in the closing minutes of the trading session. The reason? A new potential deal with Elon Musk‘s xAI service that would give Oracle a concession in one of the biggest artificial intelligence plays around.
The latest word notes that, under the terms of the deal being discussed, xAI would rent a slate of cloud servers from Oracle, which would prove a massive deal. How massive? xAI could shell out as much as $10 billion for the servers in question. The deal is still in progress, and neither side is saying much about it one way or another.
But if it goes through, and in the amounts suggested, xAI would be one of Oracle’s biggest customers and stay so for the next few years. Oracle has already been making advances in AI, and serving as a major platform for xAI would only augment its position therein.
Is Oracle a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 16 Buys and 13 Holds assigned in the past three months, as indicated by the graphic below. After a 25.6% rally in its share price over the past year, the average ORCL price target of $139.13 per share implies 15.13% upside potential.
