Oracle’s $50B AI Investment Spooks Wall Street Investors

Benzinga

Oracle stock fell after the company announced plans to raise up to $50 billion in funding to expand its AI cloud infrastructure. The financing will support rising demand from major customers like Nvidia, Meta, AMD, OpenAI, and TikTok, but investors reacted negatively to the scale of the capital raise and potential dilution.  With Oracle trading near its 52-week lows and analysts still projecting strong earnings growth, the market is now debating whether this is a long-term AI opportunity or a costly overextension. Here’s what investors need to know about Oracle’s AI strategy, funding plan, and what comes next ahead of earnings.  Source: https://www.benzinga.com/markets/large-cap/26/02/50294700/ai-gold-rush-or-costly-gamble-oracle-stock-falls-after-50-billion-funding-plan

Transcript

00:00Oracle just announced a $50 billion AI expansion and the stock dropped.

00:04Oracle says it needs between $45 and $50 billion to scale its cloud infrastructure for AI.

00:10That includes demand coming from NVIDIA, Meta, AMD, OpenAI, and TikTok.

00:15But here's the catch, about half of the money comes from new equity,

00:19meaning dilution, and the rest comes from new debt issued next year.

00:23Markets didn't love that.

00:24Oracle shares slid as investors started asking a bigger question.

00:28Is this the next AI gold rush or an expensive gamble?

00:32Technically, the stock is already under pressure, trading well below moving averages and closer to its yearly lows.

00:38Still, analysts aren't backing away.

00:40The average price target sits above $300, with earnings expected to grow sharply when Oracle reports in March.

00:47So this becomes a timing story.

00:49Short-term pain from funding massive AI buildout versus long-term upside if Oracle becomes a backbone of AI infrastructure.

00:56Big bet, big risk, big payoff, or a very expensive miss.

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