Oracle $ORCL ( ▲ 7.58% ) is heading into earnings with a very different vibe from the last time it stepped up to the plate. In September, the company shocked Wall Street with a $455 billion AI sales backlog tied to OpenAI, and the stock went vertical. Shares jumped more than 20 percent, over $200 billion in market value appeared in minutes, and Oracle briefly crowned a new richest man on earth.
Fast forward three months and all of that OpenAI-fueled euphoria has evaporated. Oracle is now trading below where it was before the big reveal, wiping out roughly $300 billion in shareholder wealth. The same backlog that once had investors chanting AI to the moon is now being treated as a mild negative, which captures the market’s mood shift from pure optimism to show-me skepticism.
Analysts still expect the numbers to look solid. Wall Street is forecasting Q2 revenue of $16.19 billion, up more than 15 percent, and adjusted earnings of $1.64 per share near the top of guidance. Expectations for Q3 also look healthy on paper. The issue is that investors want more than strong revenue growth. They want clarity on the cost side, especially as Oracle pushes deeper into capex-heavy data center build-outs.
At the current trajectory, Oracle is expected to burn roughly $17 billion a year in cash by 2027 as it spends on servers, networking gear, and the chips needed for hyperscale AI workloads. Some analysts warn that the business is shifting from a dependable cash generator to a cash-consuming machine. Bond markets have also started to price in rising concern about Oracle’s future ability to service its debts.
Another risk is the company’s tight linkage to OpenAI. Oracle has signed deals to provide roughly $300 billion worth of cloud infrastructure to the startup. If OpenAI’s competitive position weakens or if it struggles to secure the capital needed to pay for that capacity, Oracle could be left exposed. With Google’s Gemini gaining ground and the broader AI leaderboard tightening, that uncertainty has become harder for investors to ignore.
For Oracle’s stock to recover, analysts say the company must clear up two things. Investors want a roadmap for capex discipline and a firmer explanation of how Oracle will protect itself if OpenAI stumbles. Until then, the market is unlikely to revisit the euphoria it showed in September.