We recently published 10 Trending Stocks to Watch as Brad Gerstner Explains Tailwinds for AI Trade – ’10x Manhattan Project’. Oracle Corp (NYSE:ORCL) is one of the trending stocks to watch.
Joseph Terranova, Senior Managing Director, Virtus Investment Partners, recently commented on Oracle Corp (NYSE:ORCL) following the stock’s decline on a media report that said the company’s margins related to its Nvidia Cloud business are low. The analyst said Oracle Corp (NYSE:ORCL) stock gains following its AI deals showed “euphoria,” and the company may not be in a strong position to invest heavily like Amazon or Alphabet.
“I think that’s the euphoria. I think it’s represented on September 10th. You know, Josh is talking about a bubble. Sir John Templeton talks about the stages of a bull market. The last stage is euphoria. And in certain areas of the market, there will be euphoria. I think Oracle Corp (NYSE:ORCL) is a classic example of that. September 9th to September 10th, a parabolic 40 plus% move higher. And then the dramatic steady retracement ever since. Why? Because the spending here is being done by debt. That is not what the market should be encouraged by. What the market previously had been encouraged by in the early stages of 2025 and in 2024 is that free cash flow was the catalyst behind a lot of the spending. You don’t want to see this evolve into a debt-driven cash spend on CapEx. That’s troubling for the market, and I think it’s clearly represented here. I understand why Oracle Corp (NYSE:ORCL) did what they did in signing the deal. They need to suffer in the near term with their profit margins for long-term profitability. But in reality, maybe they are not best positioned like a Google or like an Amazon to accept that type of financial dynamic.”
Why are some analysts reluctant about the Oracle-OpenAI deal? OpenAI is expected to burn about $115 billion over the next four years and is not projected to be profitable until 2030. Even after Nvidia’s latest $100 billion investment by Nvidia, OpenAI will likely need to raise over $200 billion in total funding to cover its commitments. Some analysts believe Oracle may need to borrow tens of billions to build enough data centers for the deal.
ClearBridge Large Cap Growth Strategy stated the following regarding Oracle Corporation (NYSE:ORCL) in its third quarter 2025 investor letter:
“During the quarter, the Strategy initiated new positions in infrastructure software providers Oracle Corporation (NYSE:ORCL) and Datadog and added to custom silicon developer Broadcom. Oracle, a leading provider of database software for large enterprises, has successfully expanded into cloud infrastructure as a platform to run generative AI workloads. Oracle is gaining share among hyperscalers due to its lower-cost data center architecture, which is well-suited for large scale AI training workloads. We believe Oracle’s share of the market will continue to grow over the next few years with profitability of this growth underappreciated by the market.”
