Oracle Stock: Why It Tanked, And What You're Missing

Oracle's AI Hype Train: Or How to Lose 40% and Still Pretend You're Winning

Alright, let's get this straight. Oracle. ORCL. Down in the dumps, stock-wise. And now the "analysts" are crawling out of the woodwork to tell us it's a "discount"? Give me a break.

The "Discount" Illusion

First off, I saw one genius claiming ORCL is trading at 37.8x forward earnings, therefore "far from cheap." Oh really? So, if a stock might go up later, it's automatically overpriced now? That's some galaxy-brain thinking right there.

It's like saying a used car is expensive because it could be a classic someday. Newsflash: most used cars end up in the junkyard. And most "discount" stocks just keep on tanking.

This whole "AI savior" narrative they're pushing... it's thinner than my patience after a two-hour Zoom meeting. Oracle's RPOs (Remaining Performance Obligations) shot up, thanks to "demand for Oracle Cloud infrastructure." Translation: they signed a massive deal with OpenAI.

And what happened next?

The OpenAI Mirage

Analyst Gil Luria at DA Davidson slashed his price target on Oracle, basically saying that OpenAI might not be a "serious counterpart" and Oracle was just "a pawn in the grand game of fake it 'till you make it." Ouch.

They're trying to sell us this image of Oracle as some AI powerhouse, riding the wave with NVDA and Meta. But let's be real, this ain't the same ballgame. Nvidia is building the shovels and selling them during the gold rush. Meta is, well, doing whatever Zuck does these days (building the metaverse?). Oracle? They're selling… something. Cloud services? Data solutions? I'm not even sure they know anymore.

The numbers don't lie. ORCL stock is down, and anyone trying to spin this as a "buying opportunity" is either delusional or trying to unload their bags on unsuspecting retail investors. Why Oracle Stock Sank Today

And don't even get me started on the free cash flow. Negative $5.88 billion! That's not a "discount"; that's a dumpster fire sale. They're burning cash faster than I burn through coffee on a Monday morning.

But hey, they're investing in AI, right? Capex is soaring! That's gotta be good, right? Maybe, maybe not. Throwing money at a problem doesn't guarantee a solution. Just ask anyone who's ever tried to fix a leaky faucet with duct tape and a prayer.

Offcourse, they can try to spin it. They can wheel out the analysts with their rosy projections and their "moderate buy" ratings. But I'm not buying it.

Then again, maybe I'm the crazy one here. Maybe Oracle will pull a rabbit out of its hat. Maybe AI will save them. Maybe pigs will fly.

Options Shenanigans

I saw one article trying to make sense of "unusual activity" in Oracle's put options. Some folks are betting ORCL stock will tank by 50% in a year. Others are selling those puts, pocketing a measly 5% yield. It's like watching two drunks arm-wrestle – entertaining, but ultimately pointless.

The article tries to justify a $325 price target based on future OCF margins. They're projecting massive revenue growth and assuming Oracle can maintain a healthy OCF margin. That's a lot of "ifs." A whole damn forest of "ifs."

So, What's the Real Story?

Oracle's playing the AI game, but they're late to the party and they're not exactly dressed for success. The stock has taken a beating, and while there might be a small chance of a rebound, I wouldn't bet my rent money on it. This whole thing stinks of desperation and overhyped promises.