Oracle Corporation

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Bearish -50

Oracle stock falls as OpenAI reportedly misses targets; $300B deal in focus - Invezz

📉 Oracle shares dropped approximately 5% in early premarket trading following reports that OpenAI missed internal growth targets.

⚠️ The Wall Street Journal reported that OpenAI failed to meet its goal of reaching 1 billion weekly active users by the end of 2025.

💸 SoftBank's stock plunged 9.9% as investors re-priced its exposure to OpenAI, where it holds a 13% ownership stake.

🤖 ChatGPT market share fell from 86.7% a year ago to 64.5% in January 2026, while Gemini's share rose sharply to 21.5%.

⚠️ OpenAI's CFO expressed internal concerns about meeting future computing contract obligations due to revenue growth slowdowns.

💰 Oracle is raising approximately $50 billion through debt and equity to fund data center capacity before the massive $300B deal revenue begins.

📊 Oracle's remaining performance obligations surged 325% to $553 billion, highlighting heavy exposure to a single customer.

🗣️ Hedge fund manager George Noble warned that Oracle's strategy relies on project financing and faces potential fragility if OpenAI contracts stall.

🤝 Dan Ives of Wedbush maintained an 'Outperform' rating with a $225 price target, arguing the heavy investment is a strategic shift rather than a risk.

📈 Analyst sentiment remains divided with 34 out of 44 analysts currently rating Oracle shares as 'Buy' or higher.

📉 Retail investor sentiment weakened on Stocktwits after reports circulated about potential stock drops related to the OpenAI news.

Bullish Signals
  • Oracle has secured a massive $300 billion, five-year cloud agreement with OpenAI, providing significant long-term revenue visibility.
  • According to analyst Dan Ives at Wedbush Securities, the company's capital expenditure is not a risk but a strategic shift toward becoming a foundational infrastructure provider for the AI economy.
  • Oracle has strengthened its balance sheet by raising $30 billion through investment-grade bonds and preferred stock, addressing potential liquidity concerns.
  • Despite market volatility, 34 out of 44 analysts currently rate Oracle shares as 'Buy' or higher, indicating strong institutional confidence in the stock's future prospects.
  • Analyst Dan Ives has assigned an Outperform rating with a price target that implies roughly 40% upside potential based on his assessment of the long-term contract value.
  • Data cited in the report showed ChatGPT dropped from 86.7% a year earlier to 64.5% in January 2026, but Oracle's deal is expected to begin contributing meaningfully only next year once the contract converts into credible revenue.
  • The remaining performance obligations surged 325% to $553 billion, highlighting the scale of future revenue embedded in long-term contracts like the OpenAI agreement.
Risk Factors
  • Oracle's AI capex is viewed as a concentrated, timing-dependent bet on OpenAI, now that WSJ reports OpenAI growth/revenue is slipping.
  • OpenAI reportedly missed internal targets for user growth and revenue, casting a shadow over Oracle's revenue visibility just as it ramps data-center spending.
  • The risk of customer concentration is highlighted by OpenAI potentially struggling to meet computing contract obligations if revenue growth doesn't accelerate.
  • Oracle has remaining performance obligations that surged 325% to $553 billion, raising sustainability concerns before meaningful revenue from the deal begins next year.
  • SoftBank shares fell 9.9% following OpenAI's missed targets, directly impacting sentiment around AI winners/losers and SoftBank's 13% stake in OpenAI.
  • Data shows ChatGPT's market share dropped significantly from 86.7% to 64.5%, while rival Gemini surged to 21.5%, indicating competitive threats to OpenAI.
  • Oracle shares are already down ~50% from their 52-week high, with some retail investors expressing strong caution and embarrassment over the stock.
  • George Noble warned that Oracle's bullish narrative is heavily dependent on the concentrated OpenAI contract, which could be built on fragile foundations.
  • Concerns exist that recent earnings performance may be supported by accounting adjustments and cost-cutting measures rather than organic growth.
  • Market skepticism persists regarding Oracle's project financing structures, potentially understating actual exposure beyond reported debt loads.
Full Analysis
Shares of Oracle Corporation fell approximately 5% in early premarket trading on Tuesday following a Wall Street Journal report indicating that OpenAI has missed internal targets for user growth and revenue. The WSJ article highlighted that OpenAI failed to meet its goal of reaching 1 billion weekly active users by the end of 2025 and lagged behind multiple monthly revenue goals earlier in the year. This development casts a shadow over Oracle's long-term revenue visibility, particularly concerning the massive $300 billion, five-year cloud agreement announced last year between the two companies. The concerns regarding OpenAI's performance have rippled beyond Oracle, impacting other stakeholders in the sector. SoftBank Group, which holds a 13% ownership stake in OpenAI, saw its shares plunge 9.9%, reflecting market repricing of its investment value as rivals like Gemini and Anthropic capture market share. Meanwhile, AI infrastructure provider CoreWeave declined by 3.5%. The report noted that Oracle's ChatGPT usage has seen a decline in market share, dropping from 86.7% to 64.5% between a year earlier and January 2026, while Gemini’s share rose sharply from 5.7% to 21.5%. Investors are now scrutinizing Oracle's financial position and strategic bets as it ramps up data-center spending to support anticipated AI demand, with performance obligations surging 325% to $553 billion. The company is currently raising approximately $50 billion through debt and equity to fund additional capacity. George Noble, a hedge fund veteran, warned that Oracle's AI push relies on project financing structures to keep borrowing off the balance sheet, suggesting actual exposure may be understated. He cautioned that the bullish narrative is heavily dependent on the concentrated bet of the OpenAI contract and noted that delays or lender skepticism could pose significant risks. Despite the bearish sentiment, analyst opinions remain divided on Oracle's trajectory. Data from Koyfin shows 34 out of 44 analysts rate Oracle shares as 'Buy' or higher, with an average price target implying roughly 40% upside. Dan Ives of Wedbush Securities reiterated a positive stance with an Outperform rating and a $225 price target on April 24, arguing the market misinterprets heavy capital expenditure as risk rather than a necessary strategic shift for Oracle's transformation into a foundational infrastructure provider. Oracle shares have already declined about 50% from their 52-week high reached last September, though retail sentiment has weakened in recent days with traders expressing caution on Stocktwits.