Oracle Shares Drop Amid OpenAI Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy ORCL?
Source: Fool
- Stock Volatility: Oracle shares fell by as much as 6.3% in early trading, reflecting market concerns over the latest updates from its partner OpenAI, particularly in the context of heavy investments in AI infrastructure.
- Partner Risk: OpenAI's failure to meet internal targets and management's questioning of data center spending surfaced at a sensitive time, coinciding with Tesla CEO Elon Musk's lawsuit against OpenAI CEO Sam Altman, potentially leading to significant strategic shifts at OpenAI.
- Financial Pressure: According to S&P Market Intelligence, Oracle's capital expenditures are projected to push its net debt to $176 billion by 2029, and while strong revenue growth from OpenAI is anticipated, short-term financial pressures may impact Oracle's cash flow performance.
- Market Confidence Issues: Concerns over OpenAI's growth prospects have led to an increase in the price of credit default swaps on Oracle's debt, indicating investor worries about default risk, and the recent stock price rally has not been significantly supported by the bond markets.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ORCL?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 161.390
Low
180.00
Averages
309.59
High
400.00
Current: 161.390
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.
Analysts Claim OpenAI Concerns Are Overreactions
- Market Reaction Analysis: Despite the drop in shares of OpenAI-linked companies, Wedbush Securities believes that concerns over OpenAI missing internal growth targets are an “overreaction,” reflecting confidence in AI-driven tech stocks.
- Sustained Demand: Analysts emphasize that OpenAI continues to experience strong demand in both consumer and enterprise sectors, countering notions of weakening growth and indicating solid future growth potential for the company.
- Capital Raising Capability: Oracle is working on raising $50 billion in debt and equity, while OpenAI has successfully raised $122 billion, providing robust financial support for both companies to ensure ongoing business development.
- Investment Opportunity: Analysts view the pullback in Oracle's shares as a solid buying opportunity, especially with OpenAI expected to go public by the end of the year, which will provide new capital sources to meet future funding needs.
See More
Veeva Systems Joins S&P 500 Index
- Stock Surge: Veeva Systems (VEEV) shares surged over 11% in Thursday's after-hours trading due to the announcement that it will replace Coterra Energy (CTRA) in the S&P 500 index on May 7, which is expected to trigger significant passive fund buying and increase market attention.
- Market Valuation: Michael Burry noted that VEEV's forward P/E ratio of 17.6 is lower than Tyler Technologies' 26.4 and Oracle's 21.4, indicating its relative undervaluation among peers, which may attract value investors looking for bargains.
- Revenue Growth: Veeva reported a 16% growth in both quarterly and fiscal year 2026 revenues, driven by increasing subscription revenues, despite its stock declining nearly 29% this year, reflecting broader sell-off pressures in the cloud software sector.
- Improved Investor Sentiment: Retail sentiment around VEEV on Stocktwits shifted from 'neutral' to 'bullish' in the past 24 hours, with one user suggesting the stock is worth $300, indicating a potential upside of 73% based on its last close, reflecting optimism about its future performance.
See More
Veeva Systems Joins S&P 500 Index
- New S&P 500 Member: Veeva Systems announced its inclusion in the S&P 500 index effective May 7, replacing Coterra Energy, which is being acquired by Devon Energy; this move is expected to attract more fund managers to purchase its shares, potentially boosting its stock price.
- Stock Price Surge: Following the announcement, Veeva's stock jumped nearly 10% in after-hours trading, despite a 30% decline this year due to investor concerns over threats from artificial intelligence, indicating a divergence in market sentiment regarding its future performance.
- Financial Performance: Veeva reported a quarterly profit of $244 million on approximately $836 million in revenue, reflecting a nearly 16% year-over-year growth, demonstrating strong sales in its cloud software offerings for the life sciences sector despite intense competition.
- Industry Competition: Veeva faces significant competition from major players such as Amazon, IQVIA, Microsoft, Oracle, and Salesforce; however, its market position in the life sciences industry remains robust despite the potential threats posed by artificial intelligence.
See More
Veeva Systems Joins S&P 500 Index
- Stock Surge: Veeva Systems' stock jumped nearly 10% in after-hours trading following the announcement of its inclusion in the S&P 500, indicating market optimism about its future performance, particularly as being added to major indices typically attracts more fund managers to buy its shares.
- Replacement Company: Veeva will officially join the S&P 500 on May 7, replacing Coterra Energy, which is being acquired by Devon Energy; this change not only reflects market recognition of Veeva but also underscores its strategic importance in the life sciences sector.
- Financial Performance: Veeva reported a quarterly profit of $244 million on approximately $836 million in revenue, growing nearly 16% year-over-year, demonstrating solid fundamentals despite concerns about potential disruptions from artificial intelligence in the cloud software industry.
- Market Competition: Although Veeva's stock has fallen 30% in 2026, its competitors like Amazon, Microsoft, and Oracle are facing similar market pressures, highlighting the vulnerability of the entire industry amid technological transformations.
See More
Middle East Sovereign Wealth Funds May Impact AI Investments
- Investment Risk Warning: Jack Selby of Thiel Capital highlights that Middle Eastern sovereign wealth funds account for about a quarter of global AI investments over the next five years, and prolonged conflict in Iran could drain hundreds of billions, impacting data center projects and tech companies.
- Market Underestimation: Selby asserts that markets have underestimated the Middle East's significance in AI infrastructure capital expenditures, warning that if the region starts canceling projects, the market impact could be much larger than currently anticipated, leading to increased volatility.
- Increased Funding Dependency: As AI companies grow more reliant on Middle Eastern capital, Selby cautions that cancellations of data center projects could severely affect the industry, particularly as companies like OpenAI face missed revenue targets.
- Investment Strategy Shift: Selby notes that many family offices are opting for direct investments due to dissatisfaction with private equity and venture capital funds, but he warns that their lack of expertise in assessing private companies could lead to significant investment mistakes in the current market landscape.
See More
Impact of Middle East Investors on Global AI Investments
- Middle East Investment Share: Middle Eastern investors account for approximately 25% of global AI investments committed over the next five years, highlighting the region's significance in global capital expenditure; prolonged conflict could lead to capital flight, impacting data centers and tech companies.
- Funding Risk Warning: Jack Selby warns that a pullback by Middle Eastern sovereign wealth funds could drain hundreds of billions of dollars, threatening key data center projects, indicating that the market underestimates this risk.
- Investment Strategy Shift: Selby plans to focus his Copper Sky fund on tech firms outside California, New York, and Massachusetts, believing these areas offer better value, reflecting a reconsideration of traditional investment hotspots.
- Bubble Risk Intensification: Selby notes that the AI sector faces risks of overinvestment, with top hyperscalers expected to spend over $700 billion this year, potentially leading to wealth destruction far exceeding that of the dot-com bubble, necessitating market vigilance against a possible collapse.
See More
Analysts Claim OpenAI Concerns Are Overreactions
- Market Reaction Analysis: Despite the drop in shares of OpenAI-linked companies, Wedbush Securities believes that concerns over OpenAI missing internal growth targets are an “overreaction,” reflecting confidence in AI-driven tech stocks.
- Sustained Demand: Analysts emphasize that OpenAI continues to experience strong demand in both consumer and enterprise sectors, countering notions of weakening growth and indicating solid future growth potential for the company.
- Capital Raising Capability: Oracle is working on raising $50 billion in debt and equity, while OpenAI has successfully raised $122 billion, providing robust financial support for both companies to ensure ongoing business development.
- Investment Opportunity: Analysts view the pullback in Oracle's shares as a solid buying opportunity, especially with OpenAI expected to go public by the end of the year, which will provide new capital sources to meet future funding needs.
See More
Veeva Systems Joins S&P 500 Index
- Stock Surge: Veeva Systems (VEEV) shares surged over 11% in Thursday's after-hours trading due to the announcement that it will replace Coterra Energy (CTRA) in the S&P 500 index on May 7, which is expected to trigger significant passive fund buying and increase market attention.
- Market Valuation: Michael Burry noted that VEEV's forward P/E ratio of 17.6 is lower than Tyler Technologies' 26.4 and Oracle's 21.4, indicating its relative undervaluation among peers, which may attract value investors looking for bargains.
- Revenue Growth: Veeva reported a 16% growth in both quarterly and fiscal year 2026 revenues, driven by increasing subscription revenues, despite its stock declining nearly 29% this year, reflecting broader sell-off pressures in the cloud software sector.
- Improved Investor Sentiment: Retail sentiment around VEEV on Stocktwits shifted from 'neutral' to 'bullish' in the past 24 hours, with one user suggesting the stock is worth $300, indicating a potential upside of 73% based on its last close, reflecting optimism about its future performance.
See More
Veeva Systems Joins S&P 500 Index
- New S&P 500 Member: Veeva Systems announced its inclusion in the S&P 500 index effective May 7, replacing Coterra Energy, which is being acquired by Devon Energy; this move is expected to attract more fund managers to purchase its shares, potentially boosting its stock price.
- Stock Price Surge: Following the announcement, Veeva's stock jumped nearly 10% in after-hours trading, despite a 30% decline this year due to investor concerns over threats from artificial intelligence, indicating a divergence in market sentiment regarding its future performance.
- Financial Performance: Veeva reported a quarterly profit of $244 million on approximately $836 million in revenue, reflecting a nearly 16% year-over-year growth, demonstrating strong sales in its cloud software offerings for the life sciences sector despite intense competition.
- Industry Competition: Veeva faces significant competition from major players such as Amazon, IQVIA, Microsoft, Oracle, and Salesforce; however, its market position in the life sciences industry remains robust despite the potential threats posed by artificial intelligence.
See More
Veeva Systems Joins S&P 500 Index
- Stock Surge: Veeva Systems' stock jumped nearly 10% in after-hours trading following the announcement of its inclusion in the S&P 500, indicating market optimism about its future performance, particularly as being added to major indices typically attracts more fund managers to buy its shares.
- Replacement Company: Veeva will officially join the S&P 500 on May 7, replacing Coterra Energy, which is being acquired by Devon Energy; this change not only reflects market recognition of Veeva but also underscores its strategic importance in the life sciences sector.
- Financial Performance: Veeva reported a quarterly profit of $244 million on approximately $836 million in revenue, growing nearly 16% year-over-year, demonstrating solid fundamentals despite concerns about potential disruptions from artificial intelligence in the cloud software industry.
- Market Competition: Although Veeva's stock has fallen 30% in 2026, its competitors like Amazon, Microsoft, and Oracle are facing similar market pressures, highlighting the vulnerability of the entire industry amid technological transformations.
See More
Middle East Sovereign Wealth Funds May Impact AI Investments
- Investment Risk Warning: Jack Selby of Thiel Capital highlights that Middle Eastern sovereign wealth funds account for about a quarter of global AI investments over the next five years, and prolonged conflict in Iran could drain hundreds of billions, impacting data center projects and tech companies.
- Market Underestimation: Selby asserts that markets have underestimated the Middle East's significance in AI infrastructure capital expenditures, warning that if the region starts canceling projects, the market impact could be much larger than currently anticipated, leading to increased volatility.
- Increased Funding Dependency: As AI companies grow more reliant on Middle Eastern capital, Selby cautions that cancellations of data center projects could severely affect the industry, particularly as companies like OpenAI face missed revenue targets.
- Investment Strategy Shift: Selby notes that many family offices are opting for direct investments due to dissatisfaction with private equity and venture capital funds, but he warns that their lack of expertise in assessing private companies could lead to significant investment mistakes in the current market landscape.
See More
Impact of Middle East Investors on Global AI Investments
- Middle East Investment Share: Middle Eastern investors account for approximately 25% of global AI investments committed over the next five years, highlighting the region's significance in global capital expenditure; prolonged conflict could lead to capital flight, impacting data centers and tech companies.
- Funding Risk Warning: Jack Selby warns that a pullback by Middle Eastern sovereign wealth funds could drain hundreds of billions of dollars, threatening key data center projects, indicating that the market underestimates this risk.
- Investment Strategy Shift: Selby plans to focus his Copper Sky fund on tech firms outside California, New York, and Massachusetts, believing these areas offer better value, reflecting a reconsideration of traditional investment hotspots.
- Bubble Risk Intensification: Selby notes that the AI sector faces risks of overinvestment, with top hyperscalers expected to spend over $700 billion this year, potentially leading to wealth destruction far exceeding that of the dot-com bubble, necessitating market vigilance against a possible collapse.
See More
