Oracle Stock After the OpenAI Revenue Correction: Bull and…
By Tobi Opeyemi Amure
AI summary of the source article
Oracle shares dropped 5.48 percent to $135.69 after the Financial Times reported OpenAI's annualized revenue was approaching $50 billion at the end of September, compared to earlier market rumors of $68 billion to $70 billion. Oracle is heavily exposed to OpenAI, with a reported $300 billion five-year cloud contract representing roughly 45 percent of its $664 billion backlog. Concurrently, the Wall Street Journal reported that Oracle is in talks with Apollo and Goldman Sachs regarding an off-balance-sheet special-purpose vehicle to fund and lease chips. The financing talks come as Oracle's long-term debt surpasses $160 billion following heavy capital expenditure.
Why it matters
Oracle's cloud backlog depends heavily on its multi-year OpenAI contract, leaving its valuation and debt-funded infrastructure expansion vulnerable to revisions in OpenAI's financial scale.
Key facts
- Oracle shares closed down 5.48 percent at $135.69 after reports showed OpenAI's annualized revenue was near $50 billion.
- Oracle is reportedly in talks with Apollo and Goldman Sachs to fund an off-balance-sheet entity that buys and leases back chips.
- Oracle's long-term debt exceeds $160 billion, with remaining performance obligations standing at $664 billion at the end of August.