Our recent report titled 10 Buzzing Tech and AI Stocks Everyone’s Talking About includes an in-depth look at Oracle Corporation (NYSE:ORCL), a stock gaining considerable attention among analysts.
During a recent broadcast on CNBC, Gil Luria, managing director at D.A. Davidson, raised concerns regarding the market’s overly optimistic view of Oracle’s collaboration with OpenAI. Luria emphasized that there are doubts about OpenAI’s ability to fulfill its financial commitments.
“A review of Oracle Corp (NYSE:ORCL) transcripts from recent quarters reveals that it’s not solely the latest deal with OpenAI boosting their backlog. Rather, OpenAI has been a significant factor in Oracle’s performance for several periods now. Relying on OpenAI for sustainable growth could prove risky since it may struggle to meet its financial obligations. With significant market valuation increases attributed to this partnership, we may need to reassess those figures.”
This skepticism aligns with broader concerns regarding the Oracle-OpenAI partnership. OpenAI is projected to deplete approximately $115 billion over the next four years without becoming profitable until 2030. Despite Nvidia’s remarkable $100 billion investment, analysts estimate that OpenAI will need to secure over $200 billion in total funding to meet its commitments. There are indications that Oracle might also require borrowing substantial amounts to build the necessary infrastructure.
This year, Oracle’s shares have surged by 70%, and the company’s P/E (TTM) ratio stands at about 80% higher than the sector median of 24.4, according to data from SeekingAlpha.
Furthermore, Columbia Threadneedle Global Technology Growth Strategy made noteworthy mentions of Oracle Corporation (NYSE:ORCL) in its
second quarter 2025 investor letter:
“Oracle Corporation, a leader in software databases, exceeded expectations with its quarterly results. The company announced a groundbreaking cloud agreement projected to bring in up to $30 billion annually in revenue over the coming years, resulting in shares appreciating by more than 50% during the quarter. Oracle is at the forefront of an accelerating growth phase and is leveraging favorable trends in cloud technology, databases, and applications.”
While there’s considerable potential for Oracle as an investment, we contend that other AI stocks may offer better possibilities for higher returns with less downside risk. For those interested in an undervalued AI stock that stands to benefit significantly from current market trends, we invite you to explore our free report on the best short-term AI stock.
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