Oracle Stock Drops on OpenAI Shock. CoreWeave, SoftBank Also Hit.
Oracle
ORCL
-0.18%
The stock was falling early Tuesday. The software-and-cloud computing company’s relationship with ChatGTP-developer OpenAI is under scrutiny again.
The shares were down 4.1% in premarket trading.OpenAI has recently missed its own goals for new users and revenue, leading to concerns among executives about whether it will be able to fulfill its spending commitments, The Wall Street Journal reported, citing people familiar with the matter.
OpenAI did not immediately respond to a request for comment from Barron’s early on Tuesday. The company told the Journal it was “buying as much compute as we can.”
Anything that is bad news for OpenAI is bad news for Oracle, which has a contract to provide $300 billion in computing power for the artificial-intelligence company over roughly five years. That accounts for the majority of Oracle’s massive cloud-computing backlog.
Shares of other companies with ties to OpenAI were also declining. Japan’s SoftBank Group
9984
-9.86%
—a significant investor in OpenAI—felt 9.9% in local trading, while cloud-computing company CoreWeave
CRWV
+1.74%
was down 3.5% in Tuesday’s premarket.
Jim Cramer Discussed AI Circular Deals, Top Quantum Plays & These 22 Stocks. Oracle Corporation(NYSE:ORCL) is one of the stocks discussed by Jim Cramer.
AI infrastructure giant Oracle Corporation (NYSE:ORCL)’s shares are down by 11.5% year-to-date but have gained 18.7% over the past month and 25% since April 10th. Keybanc discussed Oracle Corporation (NYSE:ORCL) on the 10th as it reiterated a $300 share price target and kept an Overweight rating on the stock. The financial firm outlined that the AI infrastructure company was targeting several high-growth and lucrative areas in the computing markets, such as deploying AI workloads, running agents, and work automation. Given its recent share price performance, Oracle Corporation (NYSE:ORCL) has crossed Jim Cramer’s radar several times over the past couple of weeks. The CNBC TV host has dubbed the stock’s performance as the vengeance of the software companies and a change of mind among investors who previously did not believe that Oracle Corporation (NYSE:ORCL) had the orders to justify financial projections. In this appearance, he mentioned the short sellers as well:
“David that’s a short squeeze.
“Well there was a cheap shot about how well their building is going. But they’ve got grand ambitions and I think that again, they can borrow for less. If you can borrow for less, you can put up more things.”
Photo from Oracle website
While we recognize the potential of ORCL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshouring trend, see our free report on the best short-term AI stock.
Oracle Corp. ORCL is one of the top 10 high-performance computing companies to invest in.
On April 24, Wedbush assigned an Outperform rating to Oracle Corp. NYSE:ORCL, while setting a price target of $225. The firm believes the company is headed toward being a key infrastructure supplier for the greater AI revolution. According to Wedbush, the company’s aggressive, contract-backed investment cycle is essentially misinterpreted by the wider market as merely speculative risk.
The firm strongly disagrees with this bearish sentiment. The company is currently developing a highly differentiated, next-gen cloud platform by leveraging its deep technological expertise. This specialized operational architecture successfully secures the most demanding artificial intelligence workloads worldwide.
On April 23, Morgan Stanley analyst Keith Weiss reduced the price target on Oracle Corp.
(NYSE:ORCL) from $213 to $207, while retaining an Equal Weight rating. The analyst reflected on the third fiscal quarter, which demonstrated improved confidence in demand as well as the company’s execution.
However, Weiss noted that there is some uncertainty surrounding factors such as underlying cost dynamics for GPU-as-a-Service, margin potential from scaling up the operations, and financing. Despite this, the stock offers approximately 41% upside potential based on consensus estimates, supporting our view that it is one of the top names in the HPC market.
Oracle Corp. (NYSE: ORCL) is a global provider of enterprise information technology solutions. Oracle Cloud has an extensive product range, which includes cloud enterprise resource planning, performance management, manufacturing management, and human capital management, to name a few. Additionally, its product portfolio also includes license support services, development tools, industry-specific hardware, and virtualization software.
While we recognize the potential of ORCL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshouring trend, see our free report on the best short-term AI stock.
Jim Cramer Discussions AI Circular Deals, Top Quantum Plays & These 22 Stocks Salesforce, Inc. (NYSE:CRM) is one of the stocks discussed by Jim Cramer.
Customer relationship management software provider SalesFlex, Inc.
(NYSE:CRM)’s shares are down by 33% over the past year and by 29% year-to-date. Truist discussed the firm on April 17th as it kept a Buy rating and a $280 stock price target. The bank’s coverage followed Salesforce, Inc. (NYSE:CRM)’s TDX developer conference, as it noted that multiple price changes with the leading Agentforce AI platform had created unease with customers. Piper Sandler also discussed the firm on April 17th as it cut the stock price target to $215 from $250 and kept an Overweight rating on the stock. The financial firm outlined that Salesforce, Inc. NYSE:CRM, along with other enterprise software firms, could face a difficult operating environment in 2026 as AI software developers continued to expand their target markets. Piper Sandler added that investors were also rethinking long-term valuation assumptions of the sector. In this appearance, Cramer shared additional context about federal business:
“Let’s take Marc Benioff and his fallen star of Salesforce. He wanted defense business, ServiceNow, federal business. Federal business is huge for these kinds of companies. And you need federal business to be able to make the great mosaic.”
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