Oracle Stock Declines Amid AI Investment Pressures
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 12 hours ago
0mins
Should l Buy GOOGL?
Source: Fool
- 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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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 314.980
Low
305.00
Averages
374.25
High
400.00
Current: 314.980
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
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.
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