Oracle Corp. (NYSE: ORCL) is at the center of a Wall Street tug-of-war. On one side, you have analysts who see the company's massive AI infrastructure push as a golden opportunity. On the other, you have investors like Michael Burry, who see a debt-fueled bubble waiting to pop. The stock has already taken a beating, but the debate is far from over.
Oracle's AI Bet Has Wall Street Split: Bulls See Cloud Gold, Burry Sees a Bubble
MarketDash
As Oracle pours billions into AI infrastructure, analysts are sharply divided. Citi and JPMorgan see massive upside, while Michael Burry is shorting the stock, warning of a debt-fueled bubble.
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Citi Sees Recovery After Sharp Selloff
Citigroup's Tyler Radke is firmly in the bull camp. He's maintained a Buy rating on Oracle with a $330 price target, suggesting the stock could more than double from its current levels. That's a bold call, especially after Oracle lost about a quarter of its value over the past three months.
Radke attributes the selloff to a mix of investor panic, credit-market pressure, and Oracle's at-the-market stock sales. But he believes the worst is over. Forced selling is subsiding, the equity program is likely wrapping up, and bond and credit default swap pricing are improving. He also sees healthy AI demand and neocloud pricing trends as potential catalysts for estimate increases ahead of Oracle's late-October earnings call and investor day.
Burry Questions Oracle's AI Spending
Then there's Michael Burry, the investor famous for betting against the housing market before the 2008 crash. He's taking the opposite side of the trade, adding to his short position on Oracle. His thesis? Excess AI computing capacity by 2028.
Burry argues that Oracle's growing reliance on debt to fund AI infrastructure "puts the bubble on a clock." And the numbers are staggering. Oracle expects up to $95 billion in fiscal 2027 capital spending, and future data center lease commitments have ballooned to about $260 billion. S&P Global Ratings even downgraded Oracle to BBB-, just one notch above junk, in July.
Burry's concern is that these commitments could become harder to justify if AI computing supply eventually outpaces demand and returns weaken. It's a classic bubble warning from a guy who's been right before.
JPMorgan Sees AI Infrastructure Upside
JPMorgan's Samik Chatterjee is also bullish, but for different reasons. He's reiterating an Overweight rating with a $200 price target. Chatterjee thinks investors are still viewing Oracle as a mature software company, underestimating its transformation into an AI infrastructure provider.
JPMorgan's projections are eye-popping: Oracle Cloud Infrastructure and infrastructure-as-a-service revenue could grow from $18 billion in fiscal 2026 to $180 billion by fiscal 2030. Oracle also ended its latest quarter with $638 billion in remaining performance obligations, including contracted business with OpenAI and Meta Platforms, Inc. (NASDAQ: META).
Sure, JPMorgan estimates Oracle may need to raise about $20 billion annually, including roughly $40 billion in fiscal 2027. But Chatterjee believes investors are putting too much emphasis on near-term financing risks. In his view, the long-term AI opportunity dwarfs the short-term debt concerns.
Earnings Outlook
Oracle is estimated to report earnings on Sept. 15, 2026. Analysts expect EPS of $1.67, up from $1.47 a year earlier, and revenue of $19.13 billion versus $14.93 billion previously. The stock trades at a price-to-earnings ratio of 25.6 times.
Top ETF Exposure
- iShares Expanded Tech-Software Sector ETF (BATS: IGV): 5.51% Weight
- First Trust NASDAQ Technology Dividend Index Fund (NASDAQ: TDIV): 5.28% Weight
- REX FANG & Innovation Equity Premium Income ETF (NASDAQ: FEPI): 7.28% Weight
Significance: Because ORCL carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
ORCL Stock Price Activity: Oracle shares were down 4.59% to $142.28 at the time of publication on Tuesday, according to market data.
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