The Big Short investor Michael Burry has reopened his short position in Oracle (ORCL), betting against one of Wall Street’s biggest AI names. He disclosed that he shorted Oracle at an average price of $144.63. Even so, analysts continue to see about 80% upside, saying Oracle’s AI cloud business is growing despite concerns over heavy spending and rising debt.
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Two ETFs to trade NBIS long or short: NEBX & NBIZBurry also disclosed a new short position in Nebius (NBIS), another AI infrastructure company. He believes some AI infrastructure companies are depreciating GPUs too slowly. If the hardware becomes obsolete sooner than expected, future depreciation costs could rise.
Why Wall Street Still Likes Oracle
Many analysts acknowledge Oracle’s challenges. The company is spending heavily to expand its AI cloud business. Debt has also risen, while free cash flow has turned negative.
Even so, many believe Oracle’s long-term outlook remains strong.
Recently, UBS analyst Karl Keirstead reiterated a Buy rating on Oracle, although he lowered his price target to $245 from $285. He said investors remain concerned about Oracle’s AI spending and rising debt. Some also question whether those investments will generate strong returns.
However, UBS believes much of that risk is already reflected in Oracle’s stock price. The firm also said concerns over delays at Oracle’s New Mexico data center may be overstated.
Investor James Foord also remains bullish on Oracle. He believes the company is investing ahead of demand rather than building capacity without customers. Foord also noted that Oracle’s cloud infrastructure revenue grew 93% year over year in the latest quarter.
Oracle Keeps Expanding Its AI Business
Oracle has continued expanding its AI business despite those concerns.
Last week, the company announced a broader partnership with Google (GOOGL) that will bring Google’s Gemini AI models to Oracle’s enterprise software platform. The deal will let customers build AI agents with Gemini while still allowing them to use other AI models.
Wall Street believes partnerships like these could support Oracle’s long-term growth, even as the company continues investing heavily in AI infrastructure.
Is ORCL Stock a Buy?
Oracle’s stock has a consensus Strong Buy rating among 32 Wall Street analysts. That rating is based on 28 Buy and four Hold recommendations issued in the last three months. The average ORCL price target of $258.38 implies 80% upside from current levels.
