Analyst Says Oracle (ORCL) ‘Classic Example’ of ‘Euphoria’

Core Viewpoint - Oracle Corp (NYSE:ORCL) is experiencing a decline in stock value due to concerns over low margins in its Nvidia Cloud business, despite initial euphoria following AI deals [2][4] Group 1: Market Sentiment and Stock Performance - The stock saw a significant increase of over 40% from September 9th to September 10th, followed by a steady retracement, indicating a potential bubble phase in the market [3] - Analysts express concerns that Oracle may not be positioned to invest heavily in AI infrastructure like competitors Amazon and Alphabet [2][3] Group 2: Financial Dynamics and Investment Needs - Oracle's recent spending is largely debt-driven, which raises concerns about long-term profitability and market confidence [3] - OpenAI is projected to require over $200 billion in funding, with Oracle potentially needing to borrow tens of billions to support its data center expansion for AI workloads [4] Group 3: Strategic Positioning and Market Share - Oracle has successfully expanded into cloud infrastructure for generative AI workloads, gaining market share among hyperscalers due to its cost-effective data center architecture [5] - The market may be underestimating the profitability potential of Oracle's growth in the AI sector [5]