Bondholders are suing Oracle over its AI losses. Is there any reason to continue buying ORCL stock and waiting for AI to pay off?

oracle (ORCL) The stock fell nearly 5% last week after a group of bondholders reportedly filed a lawsuit over losses caused by the company’s investments in artificial intelligence (AI). The lawsuit is a proposed class action filed in a New York state court representing investors who purchased about $18 billion of the company’s debt offered in September.

This legal matter has raised renewed concerns among investors about Oracle’s balance sheet and comes at a time when Oracle is increasing its spending on developing AI cloud data centers. Oracle has emerged as one of the key infrastructure players in the AI ​​industry, which has raised hopes for its long-term growth. However, this also meant high costs for Oracle’s debt investors.

Adding to the debate, BNP Paribas recently suggested that Oracle may need a further cash injection of…