Oracle's new capacity lags behind competitors, says Rothschild's Haissl

Core Viewpoint - Oracle's stock has experienced a significant decline of over 20% this month, attributed to concerns regarding its debt and exposure to AI, despite a recent uptick in share price [1] Company Analysis - The initial sell rating on Oracle was issued in September, predicting further downside due to an overly optimistic market scenario [2][3] - The company is facing challenges with GPU deployments, which are yielding low value, generating only 20 cents in net present value (NPV) for every dollar spent on capital expenditures [4] - Recent upgrades in earnings per share (EPS) estimates have increased by 15%, but this has come at a cost of an additional $50 billion, indicating that growth costs are significantly higher [4] Growth Prospects - The relevance of remaining performance obligations (RPOs) has diminished, as the associated risks require more funding for growth, and current deals will not contribute to revenue for the next two to three years [5][6] - There is a sentiment that having lower RPOs and less leverage could have resulted in a higher stock price without the burden of large signed deals [6]