Caution on Oracle Rally Amid AI Hype

about 2 months ago

Travis Hoyam

"Oracle reported earnings after the market closed and the stock jumped 40%. One speaker noted, "I would be very nervous buying into this rally just because it is the difference between real core business and what they think is to come." Additionally, the company provided projections for Oracle Cloud Infrastructure: growing 77% to $18 billion this fiscal year, then 32% to $32 billion, $73 billion, $114 billion, and $144 billion over the following four years."

Oracle (assumed ticker ORCL) is experiencing a steep rally driven by bullish future projections for its Cloud Infrastructure and AI-related services. However, the cautionary sentiment expressed, based on underwhelming core earnings and the potential disconnect between future obligations and realized revenue, suggests that investors should be wary of jumping in at these elevated levels. This insight implies an actionable position to avoid or delay buying further shares until more clarity emerges.

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