Oracle(US:ORCL) Invezz·2025-12-17 15:17Core Viewpoint - Oracle's stock has experienced a significant decline due to uncertainty surrounding financing for a key artificial intelligence infrastructure project, particularly after Blue Owl Capital withdrew from a proposed $10 billion data center deal [1][2][4]. Financial Performance - Oracle's shares have fallen nearly 40% over the past three months, erasing gains from previous multibillion-dollar contracts with notable clients like OpenAI [2]. Project Financing - Blue Owl Capital was in negotiations to invest in a Michigan data center project for OpenAI, but those discussions have stalled, leading to uncertainty in financing [3][4]. - Oracle confirmed that Blue Owl will not participate in the deal but stated that final negotiations for the equity deal are still on schedule [4][5]. Market Sentiment - The developments have raised concerns about Oracle's aggressive spending on mega-data centers and the potential for excess capacity in the AI investment boom [6]. - Investor worries have intensified regarding the sustainability of Oracle's partnership with OpenAI and the overall AI investment cycle, compounded by rising debt levels and increased capital expenditure commitments [7]. Credit Market Impact - Oracle's corporate bonds are under scrutiny as investors assess potential stress points in the AI funding model, with expectations that pressure on these bonds will continue into the new year [8]. Analyst Outlook - Despite the stock's decline, some analysts remain optimistic, with Mizuho maintaining an Outperform rating and a $400 price target for Oracle [9]. - Mizuho has raised its projections for fiscal 2027 while keeping fiscal 2026 estimates unchanged, suggesting that Oracle's current valuation presents an attractive entry point [10]. Sensitivity to Uncertainty - The recent selloff highlights the sensitivity of Oracle's shares to any signs of uncertainty regarding financing and execution, particularly in the context of the global rush to build AI infrastructure [11].