Oracle’s OpenAI-Linked Selloff Might Be Noise. Is It Time to Buy?
Oracle's stock has fallen 17% year to date and 8% in the past week due to OpenAI missing internal revenue and user growth targets, despite analysts targeting a 49% upside to $243.23. Oracle has transformed into an aggressive AI infrastructure builder with an 84% year-over-year surge in IaaS revenue.
Oracle's stock price has dropped significantly, down 17% year to date and trading at $162.90, roughly 33% below its 52-week high. The decline is attributed to OpenAI missing internal revenue and user growth targets, causing a broad AI infrastructure selloff. Oracle is a primary compute supplier for OpenAI, resulting in an outsized 8% one-week hit. Despite this, analysts remain bullish, with a consensus price target of $243.23, implying a 49% upside. Oracle's IaaS revenue surged 84% year over year to $4.89 billion, and its order backlog now dwarfs annual revenue. The company's Remaining Performance Obligations ballooned 325% year over year to $553 billion, providing a multi-year revenue runway. Oracle's bull case rests on continued AI demand, a growing multicloud database business, and a chip-neutral strategy. Analyst sentiment remains positive, with 80% of coverage being bullish.
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