Oracle(US:ORCL) Benzinga·2025-11-13 11:29Core Viewpoint - A prominent technology analyst has criticized Oracle Corp.'s AI strategy as "bad behavior" and an "irresponsible investment," contrasting it with the more stable, customer-driven AI initiatives of competitors like Microsoft, Amazon, and Google [1][2]. Group 1: Business Model and Margins - Oracle is perceived as "borrowing to provide capacity for startups," which is considered a high-risk strategy compared to its competitors who have established customer bases and cash reserves [2]. - The new AI business of Oracle is described as a "bad business with very low margins," with gross margins of 30-40% being viewed unfavorably compared to the 80% gross margins of its core business [2]. Group 2: Order Backlog and Demand Concerns - Oracle's reported $455 billion order backlog is questioned, with skepticism about the legitimacy of deals, particularly with OpenAI, which are labeled as "false promises" lacking real demand [3]. - Concerns are raised about a significant $300 billion deal with OpenAI, which is not set to commence until 2027, leading to doubts about OpenAI's ability to meet a $60 billion annual commitment [3]. Group 3: Stock Performance and Market Reaction - Despite skepticism, Oracle's stock has outperformed the S&P 500, gaining 36.72% year-to-date compared to the S&P 500's 16.74% return, although it has recently seen a decline [4]. - The stock's recent appreciation attributed to AI developments has diminished, indicating potential volatility in market perception [4].