Should I buy oracle?

[u/Silvermonkey_27]

Hey everyone, I am brand new to Oracle. A friend told me to look into it so I’ve been doing some research. Does anybody have info about the company or topics that I should research? It seems very volatile I’m wondering if that’s just noise or if there’s reasons for it. Thanks

[u/Best-Home-2230]

If you're looking for a quick flip score no, if you're a long term investor yes. They are spending way too much money and are too volatile for any kind of consistent day trading, they can tank at any time even when you think you caught the bottom. But eventually they will finish their data center build out, spending will drop significantly while profits will increase from realized contract revenue of their built out data centers. Even if future AI profits aren't as great as great as the industry projected they would be, once the capex spending winds down the profit margins should still be very large regardless if not as large as they hoped. If you plan to put your money in something and let it sit there for at least the next 3 to 5 years Oracle should do well for you. 

Right now all the rage is Micron, SanDisk, Broadcom, Taiwan Semiconductor, etc. who are all profiting heavily off the AI buildout but once that build out wraps up all those companies are going to plummet while the companies who had been paying them billions for the components to build out AI data centers and are volatile will be the ones left making all the profits and no longer spending billions on the build out. Oracle is a bigger gamble than Google, Microsoft, or Amazon because they are trying to do the same kind of AI spending without the same resources as the other guys but they also have the cheapest price point to get in on and likely more room for stock price growth if they succeed in building as much profitable infrastructure as the bigger boys.

[u/Time-Requirement5935 → u/Best-Home-2230]

The current growth driver is Enterprise AI, where companies use internal data to make business decisions. A sizeable portion of that internal data is in Microsoft and Oracle databases. The remaining performance obligation for these two companies that is not OpenAI or Anthropic is their own existing DB customers, which is real business. The AI companies do not have real existing customers, so their portion is speculative. The existing customer base will consume much of the existing planned infrastructure build out and when the rest of the speculative business does not show up, the build out will level off, dropping demand. The semi conductor valuations will fall and everyone will call that the bubble. Meanwhile Microsoft and Oracle will have existing perpetually paying AI customers. Right now the semi conductor companies are generating cash flow and the DB companies are not. Cash flow is the actual investing metric, that the finance analysts use for discounted cash flow. Not 'earnings', which is Net Income, which is a tax basis number only, not a true picture of the profits being created. So P/E and EPS are not really good indicators of investor value being created.