We recently published 10 Buzzing News to Watch as Investors Look for Best AI Stocks Amid Fed Rate Cuts. Oracle Corp (NYSE:ORCL) is one of the best AI stocks amid Fed rate cuts.
Jim Lebenthal, chief equity strategist at Cerity Partners, said in a latest program on CNBC that The Information’s report about Oracle Corp (NYSE:ORCL) margins was “unsubstantiated” and insisted that it can be called a “rumor.”
“I believe in the name and I’ve been looking for the place at which to add it…We don’t know what this unsubstantiated rumor is, where it came from, if it’s substantiated or not.”
Asked how the report can be called a rumor, the analyst said:
“It came from a news report that supposedly they saw an internal document. It was not a release by Oracle. It’s not far different than—it’s far different than a rumor. Show me. Show me the internal document. Show me a report from Oracle. Not you in particular, but one in general. It is unsubstantiated. I mean, it’s just an unsubstantiated report.”
Why are some analysts reluctant about the Oracle-OpenAI deal? OpenAI is expected to burn about $115 billion over the next four years and is not projected to be profitable until 2030. Even after Nvidia’s latest $100 billion investment by Nvidia, OpenAI will likely need to raise over $200 billion in total funding to cover its commitments. Some analysts believe Oracle may need to borrow tens of billions to build enough data centers for the deal.
Mar Vista U.S. Quality Strategy stated the following regarding Oracle Corporation (NYSE:ORCL) in its third quarter 2025 investor letter:
“Oracle Corporation’s (NYSE:ORCL) stock responded positively to its FQ1 2026 (August quarter) results, which many on Wall Street have characterized as the company’s “NVIDIA moment.” Remaining Performance Obligations (RPO; like contracted bookings) increased by $317 billion sequentially, reaching approximately $455 billion. This unprecedented surge was driven by four multi-billion-dollar contracts with three large customers who support training and inference workloads for leading large language model providers.
Management outlined a multi-year revenue roadmap that calls for $144 billion in its OCI (Oracle Cloud Infrastructure) infrastructure-as-a-service (IaaS) revenue by FY 2030, a striking step-up from approximately $10 billion reported in FY 2025. The scale and duration of these contracts are unmatched in the industry, and Oracle expects additional multi-billion-dollar deals to push RPO beyond $500 billion by fiscal year-end 2026. We believe Oracle is emerging as a Tier-1 hyperscale cloud provider, now viewed as a true peer to Microsoft Azure, Google Cloud Platform, and AWS.
While IaaS revenue carries lower gross margins compared to Oracle’s core database and enterprise SaaS (software-as-a-service) businesses, the sheer scale of growth is set to drive accelerating revenue and EPS expansion over the intermediate term. We continue to hold our position in ORCL as the company gains meaningful share in the rapidly expanding generative AI market.”
While we acknowledge the risk and potential of ORCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ORCL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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