By Faizan Farooque
Publication Date: 2025-11-26 19:11:00
This article first appeared on GuruFocus.
oracle (ORCL, Finance) recovered on Wednesday after Deutsche Bank and HSBC defended the company after a sharp decline in shares related to concerns about the costs and uncertainty of its AI infrastructure strategy. Analysts said the recent selling went too far given Oracle’s earnings outlook and its ability to manage long-term commitments.
Deutsche Bank’s Brad Zelnick said the bear scenarios appear optimistic when considered alongside Oracle’s long-term financial goals. He estimated that even if Oracle did not generate additional revenue from working with OpenAI, the impact on management’s fiscal 2030 goals would be limited, with earnings per share falling by about $4 to $17 and free cash flow falling to about $31 billion. At current prices, the company said the stock reflects little recognition of Oracle’s OpenAI relationship.
The bank also addressed investor attention on Oracle’s data center leasing commitments, which have raised questions about future costs…
