Oracle’s stock hit a new yearly low, but Wall Street analysts still price it at more than double its current value — a massive disconnect fueled by doubts over whether Oracle can turn its AI contracts into real profits without burning through cash. Despite record revenue growth and a booming cloud infrastructure business, Oracle’s massive $55 billion data center investment left it with negative free cash flow and a downgraded credit rating. Meanwhile, analysts ignore the cash burn, focusing instead on strong earnings and revenue growth — even as some gains come from selling off assets. The market treats signed deals like promises, while analysts rely on backlogs that include unprofitable customers. With Oracle planning to raise $40 billion via debt and stock sales, the next few quarters will decide if they can finally turn contracts into cash. Until then, investors are better off staying cautious.
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