Oracle (ORCL) Earnings Set to Address Data Center Funding Questions

Oracle Corporation (NYSE:ORCL) is one of the Trending AI Stocks on Wall Street. On December 8, Mizuho maintained its “Outperform” rating on the stock with a $400.00 price target. With Oracle’s second-quarter results scheduled for December 10, analyst sees the current stock pullback as a compelling entry point amid long-term AI growth tailwinds.

Oracle shares have plunged 34% from their recent peak on September 10^th, with analysts attributing the pullback to investor concerns about Oracle’s capital expenditure needs for data center buildout and its ability to finance these investments.

However, the demand for high-density AI is stronger than supply, and GPU deployments at the company are monetized within weeks. Given these circumstances, Mizuho expects that the company leverage increasingly common financing structures (primarily vendor financing and capital leases) to reduce upfront cost and limit new debt.

The firm also believes that the print ahead will likely provide additional clarity on Oracle’s data-center funding strategy. As such, the current pullback offers a compelling entry point.

“Ahead of FQ2 results on December 10, we expect Oracle to deliver a solid print and provide additional clarity on its data-center funding strategy, which should help alleviate recent concerns. We view the current pullback as a compelling entry point and reiterate our Outperform rating.”

Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.

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