Here’s Why Oracle Is Not the Next Nvidia

Core Insights - Oracle's stock experienced significant volatility, surging 85% from April lows to an all-time high of $346 per share in September, but has since dropped 42% to $200 due to rising debt concerns and slower cloud revenue growth [2][3][7] Financial Performance - Oracle's aggressive AI investments have led to a substantial increase in debt, with total debt rising to nearly $104 billion from $90 billion a year ago, driven by the issuance of $18 billion in bonds and a $38 billion loan [5][7] - Interest payments now account for approximately 20% of Oracle's quarterly net income, nearly double the 10% prior to the AI investment surge [5][7] Market Position and Competition - Despite Oracle's efforts to deepen its AI capabilities, it is struggling to keep pace with competitors like Nvidia, which has seen a 32% year-to-date increase, highlighting skepticism around Oracle's AI strategy [4][5] - Analysts project that AI capital expenditures will consume 94% of Oracle's operating cash flow (excluding dividends and buybacks) in 2025 and 2026, up from 76% last year, raising concerns about margin pressures [6][7]