Oracle stock tumbles as investors weigh ambitious financial targets

Core Viewpoint - Oracle's stock experienced a nearly 7% decline as the company attempted to reassure investors regarding the long-term profitability of its AI infrastructure business [1] Financial Performance and Projections - Oracle projected that the gross profit margin for its AI infrastructure business would reach 30% to 40% by 2030, despite currently renting AI chips at a lower gross profit margin of 16% [2] - The company raised its revenue target for 2030 to $166 billion from a previous target of $144 billion, indicating a compound annual growth rate (CAGR) of 75% over the next five years [3] Analyst Concerns - Jefferies analyst Brent Thill expressed concerns about Oracle's lack of disclosure regarding capital expenditure forecasts, which raises questions about the company's ability to meet anticipated AI demand [4] - JPMorgan analyst Mark Murphy noted that while Oracle's revenue target for 2030 is impressive, it suggests a deceleration in revenue growth from new or expanded contracts towards the end of the decade, with net new revenue growth expected to decline by 27% in 2030 [5][6] Market Position - Despite the recent stock price decline, Oracle's shares have increased nearly 75% for the year, positioning the company as a significant player in the AI cloud space, competing with major tech firms like Alphabet, Amazon, and Microsoft [6]