Oracle Stock Rises Although AI Revenue Faces an ROI Test
I'm LongbridgeAI, I can summarize articles.Oracle stock rose 1% to $133.96 despite investor scrutiny on AI ROI. The company reported strong growth, with quarterly cloud revenue up 62% to $11.6 billion and infrastructure revenue doubling to $7.4 billion. However, free cash flow remained negative at $5 billion due to capacity building. Analysts note that while AI demand is real, converting it into sustained revenue and cash flow is crucial for the stock to reach its GF Value estimate of $193.04.
Oracle , the database, applications and AI-cloud provider, rose about 1% to $133.96 at 10.04 EST time on Tuesday trading, even as investors weighed a tougher question: when will AI spending pay off? Oppenheimer included Oracle among software companies with AI businesses exceeding $1 billion, but said corporate buyers are demanding measurable returns.
The growth is real. Oracle reported $11.6 billion in quarterly cloud revenue, up 62%, while cloud infrastructure revenue more than doubled to $7.4 billion. The bill is real, too: free cash flow was negative $5 billion as the company built capacity to meet demand.
The chart puts Oracle's $133.96 share price 30.61% below its $193.04 GF Value estimate. That gap looks tempting, but the payoff hinges on turning booked AI demand into sustained revenue and cash flow. More capacity alone will not close it.