Oracle is burning money in pursuit of “hypergrowth.” Is AI Growth Stock Even a Buy? | The colorful fool

There was a lot to like oracle‘S (ORCL 0.23%) current quarterly results and forecasts for the coming financial year.

Oracle shares jumped in response to the earnings release, but as of this writing are still down 20% year to date, well behind the tech sector’s 3.3% decline S&P 500The decline is 2%.

Here’s why Oracle remains in “prove” mode to investors as the company burns cash at a breakneck pace, and some insight into whether that’s the case Growth stock is worth buying despite the obvious risks.

The Cost of Hypergrowth

Oracle stock hit an all-time high last September after announcing a detailed roadmap for Exponential Growth of artificial intelligence (AI). led by Oracle Cloud Infrastructure (OCI). But to pull this off, Oracle will have to take on significant debt due to its database and data management software segment does not generate enough cash flow to cover the costs.

As investors digested the consequences of this debt, Oracle experienced a massive…