Oracle’s AI Dilemma: Record Contracts Clash With Shrinking Profitability

The artificial intelligence boom is showing its first signs of strain at one of its biggest beneficiaries. Oracle finds itself navigating a complex landscape where analyst optimism clashes with concerning profitability metrics in its cloud computing division. The technology giant faces a critical test of its business model as it balances enormous growth potential against troubling cost structures.

Market experts remain bullish on Oracle’s prospects, with Citi raising its price target to a record $415—approximately 40% above current trading levels. This optimism stems from an astronomical $455 billion backlog of contracted business, which surged by 359% in the most recent quarter. The company has secured four separate billion-dollar agreements with three different clients, demonstrating robust demand.

CEO Safra Catz predicts the... Read more...