Oracle (Oracle (ORCL)) has become one of Wall Street's biggest artificial intelligence winners, landing massive cloud infrastructure contracts as enterprises race to secure AI computing capacity. But according to Gil Luria, managing director and head of Technology Research at DA Davidson, investors have repeatedly misjudged the company's AI opportunity.

Speaking on The Real Eisman Playbook, Luria walked through Oracle's roller-coaster valuation over the past year, arguing that while investors first became overly enthusiastic about its AI prospects, they have now swung too far in the opposite direction by assigning no value to its massive backlog of contracted AI compute revenue.

From AI Darling To Doubts

Luria recalled the market's reaction when Oracle announced its OpenAI partnership in September 2025.

“Everybody was on the bandwagon,” he said, as investors rushed to crown Oracle “the AI winner” after the company's backlog jumped from roughly $150 billion to $450 billion in a single day.

But enthusiasm quickly faded after investors realized much of that backlog was tied to OpenAI at a time when the startup had little revenue and limited capital, raising concerns about whether those long-term infrastructure commitments would ever translate into actual revenue.

‘They Are Going To Pay Their Oracle Bills’

According to Luria, the investment thesis changed dramatically once OpenAI secured fresh funding and clarified that many of its infrastructure agreements were flexible rather than fixed obligations.

“They are going to pay their Oracle bills,” he said, arguing that OpenAI had narrowed its focus to compute and now had the resources to honor the commitments that matter most.

That, he said, should have fundamentally changed how investors value Oracle's future revenue stream.

A $630 Billion Disconnect

Instead, Luria believes Wall Street is still missing the bigger picture.

“Their backlog is really being valued at zero,” he said.

As of today, Oracle's “entire backlog, $630 billion worth of backlog of compute revenue, is valued by the market at zero.” Luria even suggested investors could argue Oracle's backlog is being valued at less than nothing, adding the market is treating it “almost…negative to some extent.”

For investors, the implication is straightforward. If Oracle's AI customers continue converting those long-term compute commitments into revenue, Luria believes the market may eventually have to reprice a backlog that, in his view, is currently receiving virtually no credit despite representing hundreds of billions of dollars in future business.