Musk Responds to Stargate Project Stalling
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10 hours ago
0mins
Should l Buy ORCL?
Source: Benzinga
- Project Stalling: Musk commented on the $500 billion Stargate data center venture's stagnation, stating that 'hardware is hard,' as the project has failed to staff meaningfully since its announcement in January 2025, resulting in no direct role in building OpenAI's data centers.
- Leadership Disputes: The Stargate joint venture is gridlocked due to disagreements over leadership, structure, and financial responsibilities, with OpenAI and SoftBank clashing over control of key Texas data center sites, ultimately compromising on OpenAI leasing and designing the facility while SoftBank's energy arm develops and owns it.
- Intensifying AI Infrastructure Race: Despite Stargate's stall, the AI infrastructure arms race continues to accelerate, with Anthropic announcing a $50 billion data center buildout with Fluidstack in Texas and New York, with sites expected to come online this year.
- Market Sentiment Shift: Polymarket traders express skepticism regarding OpenAI's position in the AI race, assigning only an 11% chance of holding the top AI model by the end of June, while Google and Anthropic are seen at 40% and 35%, respectively.
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 148.080
Low
180.00
Averages
309.59
High
400.00
Current: 148.080
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Revenue Surge: Oracle's Cloud Infrastructure (OCI) revenue has surged 66% year-over-year, making it the fastest-growing major cloud platform, surpassing Amazon AWS and Microsoft Azure, which highlights its strong competitive position in the cloud computing market.
- Debt and Expansion: To meet AI demand, Oracle is accumulating tens of billions in debt and considering the sale of profitable business units to fund the necessary data center expansion, a strategy that could yield substantial returns in the future if successful.
- Massive Backlog: Oracle's backlog has exploded to over $523 billion, primarily driven by large-scale AI contracts with OpenAI, Meta, and Nvidia, providing robust support for its future growth prospects.
- Risks and Uncertainty: While Oracle's positioning in the AI sector appears promising, the majority of its backlog relies on OpenAI, whose financial situation is concerning, potentially exposing Oracle to significant financial risks that could adversely affect its stock performance.
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- Cloud Infrastructure Growth: Oracle's Cloud Infrastructure (OCI) revenue has surged by 66% year-over-year, with a backlog exceeding $523 billion driven by massive AI contracts with Meta, Nvidia, and OpenAI, indicating strong growth potential in the cloud computing market.
- Market Competitive Advantage: OCI is now the fastest-growing major cloud platform, surpassing Amazon Web Services and Microsoft's Azure, suggesting Oracle has secured a favorable position in the competitive cloud landscape, potentially attracting more enterprise clients.
- High-Risk Financial Strategy: To fund the necessary data center buildout, Oracle is taking on tens of billions in debt and considering selling profitable business units, a high-risk financial strategy that could impact the company's financial stability and lead to a significant stock price drop if growth expectations are not met.
- Risk of Dependence on OpenAI: Despite the massive backlog, a significant portion is expected to come from OpenAI, which has financial commitments that far exceed its revenue and is currently operating at a negative net income, raising concerns about the risk-reward profile for Oracle's future prospects.
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- Market Decline: On Monday, the S&P 500 Index fell by 1.04%, the Dow Jones Industrial Average dropped by 1.66%, and the Nasdaq 100 Index decreased by 1.21%, reflecting risk-off sentiment triggered by uncertainty over U.S. trade policy.
- Tariff Increase: President Trump signed an executive order raising global tariffs from 10% to 15%, a move that could curb global economic growth and negatively impact the stock market, particularly as it faces existing pressures.
- AI Risk Impact: A report from Citrini Research detailing potential risks of artificial intelligence on the global economy led to declines in software and payment stocks, with Datadog and Atlassian seeing drops of over 11% and 10%, respectively, indicating market concerns over tech stocks.
- Economic Data Highlights: Despite the stock market downturn, the U.S. January Chicago Fed National Activity Index rose by 0.39 to 0.18, surpassing expectations, suggesting that the economic fundamentals remain strong and may provide support for a future market rebound.
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- Project Stalling: Musk commented on the $500 billion Stargate data center venture's stagnation, stating that 'hardware is hard,' as the project has failed to staff meaningfully since its announcement in January 2025, resulting in no direct role in building OpenAI's data centers.
- Leadership Disputes: The Stargate joint venture is gridlocked due to disagreements over leadership, structure, and financial responsibilities, with OpenAI and SoftBank clashing over control of key Texas data center sites, ultimately compromising on OpenAI leasing and designing the facility while SoftBank's energy arm develops and owns it.
- Intensifying AI Infrastructure Race: Despite Stargate's stall, the AI infrastructure arms race continues to accelerate, with Anthropic announcing a $50 billion data center buildout with Fluidstack in Texas and New York, with sites expected to come online this year.
- Market Sentiment Shift: Polymarket traders express skepticism regarding OpenAI's position in the AI race, assigning only an 11% chance of holding the top AI model by the end of June, while Google and Anthropic are seen at 40% and 35%, respectively.
See More
- Lawsuit Background: Investors are reminded to file a lead plaintiff motion by April 6, 2026, in a class action concerning Oracle Corporation securities purchased between June 12 and December 16, 2025, highlighting investor concerns over the company's future growth.
- Stock Price Volatility: On September 25, 2025, Oracle's stock fell 5.6% to $291.33 after analysts warned that the company's AI business growth was overestimated, indicating a loss of market confidence in its prospects.
- Financial Shortcomings: On December 10, 2025, Oracle's second-quarter fiscal 2026 results missed consensus estimates, causing a 10.8% drop in stock price to $198.85, revealing serious issues in capital expenditures and free cash flow.
- Funding Risks: On December 17, 2025, Oracle's primary financial backer, Blue Owl Capital, withdrew from a $10 billion data center funding, leading to a 5.4% decline in stock price to $178.46, underscoring risks related to spending commitments and rising debt levels.
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- Stock Price Decline: Oracle's shares fell by 5.8% today, bringing the year-to-date decline to over 28%, primarily due to pressures in the bond and equity markets affecting its ability to fund AI-related expenditures, raising concerns about future revenue.
- Dependence on OpenAI: Oracle's reliance on the loss-making OpenAI has heightened market anxiety, particularly as both Oracle and Microsoft, which have significant exposure to OpenAI, have faced severe stock declines, while Alphabet has outperformed due to its limited exposure.
- Cash Flow vs. Capital Expenditure: The stark contrast between Oracle's free cash flow and capital spending has intensified worries about its financial health, especially following Nvidia's commitment of only $30 billion to OpenAI, far below the anticipated $100 billion.
- Stalled Stargate Project: The Stargate project, a joint venture involving Oracle, OpenAI, and Softbank, has stalled due to ongoing disputes over its structure, further pressuring Oracle's stock as market confidence in its ability to secure funding diminishes, suggesting continued stock pressure ahead.
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