Oracle Faces Sell Call as $70 Billion Spending Plan Outruns Growth
Updated
Updated · Seeking Alpha · Jul 11
Oracle Faces Sell Call as $70 Billion Spending Plan Outruns Growth
3 articles · Updated · Seeking Alpha · Jul 11
Summary
$70 billion in annual data-center spending has prompted a sell call on Oracle, with the analyst arguing investment is rising faster than revenue and pressuring the balance sheet.
CapEx jumped 162% to $55.7 billion in fiscal 2026, pushing free cash flow to negative $23.7 billion and cutting gross margin by 5 points.
More than half of Oracle's $638 billion backlog is tied to OpenAI, leaving the company exposed to customer concentration risk as OpenAI's IPO is delayed to 2027.
Despite strong cloud growth and broadly bullish Wall Street sentiment, the analyst estimates Oracle's intrinsic value at $113.97, roughly 20% below the current share price.