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Oracle (NYSE:ORCL) has given its shareholders whiplash over the past week. The stock jumped after the company’s October 28 Investor Day, where it finally put a date on when its AI spending would stop draining cash. That optimism faded fast. On Monday, Oracle filed to raise $20 billion through a mix of bonds and new shares, and the stock tumbled 9% before partly recovering on Tuesday.

Wednesday’s news hasn’t knocked it around much, even though there was plenty to digest. The Financial Times reported that Oracle canceled a roughly $7 billion AI chip leasing deal with Tencent after U.S. officials raised concerns. Data center stocks are also under pressure on worries that the midterm election results could bring tighter limits on the sector.

Despite all the volatility going on here, investor Oliver Rodzianko, who ranks among the top 1% of investors on TipRanks, is looking past the daily swings.

What caught his eye at the investor day was Oracle’s spending plan. Management said capex will peak in fiscal 2027 and 2028, then step down in fiscal 2029, which begins in June 2028. Free cash flow is expected to turn positive in the second half of fiscal 2028 and reach at least $30 billion the following year.

Rodzianko sees that as a signal for the whole sector. In his view, Oracle is simply admitting what applies across big tech: companies can’t keep borrowing and burning cash on AI forever. When that spending slows, chipmakers like Nvidia lose orders. Since markets usually price things in about a year early, he thinks chip stocks could start feeling it in the second half of 2027. He’s careful not to overstate the case, though. Oracle’s guidance alone doesn’t prove a chip slump is coming, and customers bringing their own GPUs could keep hardware demand strong.

For Oracle, however, the shift is good news. Rodzianko argues all that spending serves a purpose. Building AI data centers on this scale is so expensive that few rivals can follow, which leaves Oracle well placed once the heavy bills ease. As capex falls, he expects the debt load to lighten, the balance sheet to strengthen, and free cash flow to grow again. He also likes that management isn’t planning to spend beyond what it can finance.

Getting there won’t be smooth. In Q1, $23.1 billion in operating cash flow didn’t cover $28.5 billion in capex, and $11.4 billion of that cash came from customer prepayments. Oracle also has $288 billion in data center lease commitments due to start between now and fiscal 2029, each running 15 to 19 years. Borrowings stood at $125.3 billion as of August 31. If AI demand cools, Oracle could be left paying for capacity it can’t fill, so the recovery depends on utilization, pricing, and collections holding up.

Rodzianko also thinks the stock is cheap. Even assuming modest earnings growth, his math suggests the shares trade about 29% below what the business is worth

In the end, Rodzianko sees the current fear as a chance to build a position over time. “We’re in the ballpark for strong medium- to long-term returns,” the 5-star investor summed up. “Thus, I would ignore the price action in the near term after entry and just know that the accumulated value is strong. Time will do the rest for you.”

Bottom line, Rodzianko rates Oracle stock a Buy. (To watch Rodzianko’s track record, click here)

So do most of the Street’s analysts. Based on 28 Buys, 4 Holds and 1 Sell, the stock claims a Strong Buy consensus rating. At $242.50, the average price target suggests shares will gain 92% in the months ahead. (See ORCL stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.