UBS thinks investors should buy into Oracle as the artificial intelligence winner continues to attract new customers. Analyst Karl Keirstead upgraded the database management company to buy from neutral and raised his price target by $20 to $140. The firm’s new forecast suggests a 19.8% upside from Monday’s close. “We are increasingly confident that Oracle has carved out an under-appreciated edge in terms of its GPU capacity as well as its [Oracle Cloud Infrastructure] architecture, enough to attract new customers and drive OCI usage,” Keirstad wrote in a Monday note. “We believe GPU supply constraints could be enough to drive outsized performance in Oracle shares.” Shares of Oracle have popped nearly 43% this year, boosted by investors’ views that the company is an AI beneficiary. Shares are up 2.7% in premarket trading Tuesday. “Oracle is benefiting from outsized allocations of Nvidia GPUs relative to its size,” the analyst wrote. “We could be sitting in front of 6-12 months of GPU shortage noise and we haven’t even seen the $2b in AI start-up commitments convert to OCI usage.” Oracle could have an edge in GPU speed-to-deployment, he said, adding that its core database business could also get a lift from increases in cloud migration activity and/or quietly benefit from AI. The “crux” of the firm’s increased confidence in the stock is its constructive view of Oracle’s cloud infrastructure segment, which accounts for 10% of the company’s overall revenue and 30% of its year-on-year revenue growth in its recent quarter. Despite its stock price run-up this year, UBS thinks shares still have plenty of room to grow. Keirstead noted four positive catalysts for the company, including: AI start-ups may only be in their first quarter in ramping up their use of OCI Oracle’s potentially “constructive” four-day CloudWorld conference in September The company’s P/E multiple of 20x does not meet UBS’ estimates, even while its free cash flow multiple “looks full” Less than half of sell-side analysts rate Oracle shares a buy — CNBC’s Michael Bloom contributed reporting.