This article first appeared on GuruFocus.

Oracle (ORCL, Financials) rallied Wednesday after Deutsche Bank and HSBC defended the company following a sharp slide in the stock tied to concerns over the cost and uncertainty of its AI infrastructure strategy. The analysts said recent selling has gone too far, given Oracle's earnings outlook and its ability to manage long-term commitments.

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Deutsche Bank's Brad Zelnick said the bear case looks bullish when examined alongside Oracle's long-range financial targets. He estimated that even if Oracle generated no additional revenue from its work with OpenAI, the hit to management's fiscal 2030 goals would be limited, cutting EPS by about $4 to $17 and reducing free cash flow to roughly $31 billion. At current prices, the firm said the stock reflects little credit for Oracle's OpenAI relationship.

The bank also addressed investor focus on Oracle's data-center lease obligations, which have raised questions about future cost pressure. While acknowledging the scale of those commitments, analysts said Oracle retains flexibility in how it manages the leases. They estimated that a scenario where the company bears roughly half of the associated costs would still support earnings near $15 a share and free cash flow around $26 billion.