In a note to clients on Friday, Goldman Sachs raised several critical questions regarding hyperscaler Oracle’s AI strategy as pressures intensify on the AI sector and investors become increasingly hesitant to allocate capital. Analyst noted that the discourse surrounding Oracle is focused on the relationship between monetisation and capital expenditures; the durability of demand in light of customer concentration; and the firm’s capacity to execute in the face of political challenges impacting the data center expansion.
Borges has a buy rating on the stock and a price target of $206, implying upside of 64.1% compared to a closing price recorded as $125.54. Among the key risks to the company listed by Goldman are “intense capex investment cycle and financing needs.”
“Oracle has outlined a FY27 financing framework supported by roughly $20bn of equity issuance (ATM program, already executed), $20 – 25 bn of customer prepayments ($11 bn as of 1Q), ~$20bn of debt issuance (expected in 2HFY27), with the remainder funded through operating cash flow,” Borges wrote.
