Cash Burn Remains Long-Standing ORCL Headwind, TikTok Question Marks Linger

Core Viewpoint - President Trump signed an executive order to preserve TikTok's operations in the US, with Oracle expected to be involved in a deal addressing national security concerns [1][7]. Company Performance - Oracle's stock experienced a significant rally of 35% after strong earnings and aggressive cloud revenue guidance, but has since dropped over 15% from its all-time high of approximately $345 [2][3]. - The initial excitement around Oracle's cloud infrastructure and AI deals has waned, leading to a reconsideration of the stock's long-term financial impact [4][5]. Financial Outlook - Oracle is projected to burn cash in the coming years as it invests in building out its infrastructure, raising questions about the return on investment and monetization strategies [4][5]. - Analysts have expressed concerns that the current valuation of Oracle may be overstated, despite promising earnings outlooks [6]. TikTok and Oracle's Involvement - The details of the TikTok deal remain unclear, but there are indications that Oracle may license a version of TikTok's algorithm while ensuring US data security [7][9]. - The valuation of the TikTok joint venture has been suggested to be worth $14 billion, but some analysts believe it could be worth two to three times that based on user base and revenue growth [8][9]. Market Sentiment - There is a growing concern about the sustainability of AI-related investments, with some companies potentially facing significant challenges while others may emerge as leaders [12][13]. - The current market environment reflects a rotation away from previously high-flying tech stocks, indicating a need for selectivity in investment choices [11][12].