Analyst After Oracle (ORCL) Margin Report: There Are ‘Cracks’ In Belief That This Will ‘Keep Going’

Core Viewpoint - Oracle Corporation is facing skepticism regarding its AI Cloud business margins, with analysts noting potential weaknesses in the ongoing growth driven by AI deals [1][2]. Group 1: Analyst Insights - Karen Finerman, CEO of Metropolitan Capital Advisors, highlighted concerns about Oracle's AI Cloud margins being thin and noted "cracks" in the market's confidence regarding the sustainability of large AI deals [1]. - Finerman mentioned that the market is questioning the realization of significant revenue projections, citing a lack of evidence for the promised growth despite large headline numbers [1]. - Analysts express concerns about Oracle's potential need to borrow tens of billions to support its commitments related to the OpenAI deal, given OpenAI's projected $115 billion burn over the next four years [2]. Group 2: Market Position and Growth Potential - ClearBridge Large Cap Growth Strategy initiated new positions in Oracle, recognizing its successful expansion into cloud infrastructure for generative AI workloads [3]. - Oracle is gaining market share among hyperscalers due to its cost-effective data center architecture, which is advantageous for large-scale AI training [3]. - The market may be underestimating the profitability of Oracle's growth in the cloud infrastructure sector, suggesting a positive outlook for its market share in the coming years [3].