Oracle (ORCL) CEO Clay Magouyrk, who was recently appointed to co-lead the tech company, says he’s confident that AI firm OpenAI (PC:OPAIQ) can afford the huge cloud computing bill it’s racking up. More specifically, at Oracle’s AI World conference, Magouyrk told CNBC that OpenAI can “of course” pay $60 billion for a year’s worth of cloud services. In fact, OpenAI and Oracle recently signed a five-year deal worth over $300 billion in July, which highlights just how fast OpenAI is growing, despite posting a $5 billion loss in 2024.
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Unsurprisingly, Magouyrk pointed to OpenAI’s success by saying it’s rare for a company to reach nearly a billion users so quickly. As a matter of fact, ChatGPT, OpenAI’s popular chatbot, launched less than three years ago and now has 800 million weekly active users. Separately, Co-CEO Mike Sicilia stated that Oracle is already using OpenAI’s models in its healthcare software, especially in patient portals tied to Cerner, which Oracle acquired for $28 billion in 2022.
It’s worth noting that to power its AI models, OpenAI rents Nvidia (NVDA) chips through Oracle while also working with CoreWeave (CRWV), Google (GOOGL), and Microsoft (MSFT). At the same time, OpenAI is building its own custom AI chip, which Broadcom (AVGO) will manufacture. Together, OpenAI and Broadcom plan to roll out 10 gigawatts worth of chip capacity, a massive infrastructure build that will need a lot of energy. However, Sicilia said that getting enough power is just a matter of time.
Is ORCL Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 27 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $346.45 per share implies 12.5% upside potential.
