Key Stats for Oracle Stock
- Price change for Oracle stock in last 1 year : -52%
- $ORCL Stock Price as of Sep. 30: $137
- 52-Week High: $323
- $ORCL Stock Price Target: $238
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What Happened?
Tencent has signed its largest overseas lease deal with Oracle (ORCL), the Financial Times reported on Wednesday.
The deal gives Tencent access to about 100,000 advanced AI chips not available in China.
Here is what the report says:
- Tencent agreed to a five-year lease this year.
- The lease covers several Oracle data centers in Southeast Asia.
- The deal is worth about $7 billion.
- Tencent is paying about 30% upfront.
Reuters could not verify the report. Oracle and Tencent did not respond to its requests for comment.
The deal shows how fast Tencent’s computing needs are growing. The company is spending more to build and run large language models.
It also recently released a preview of a new AI image-generation model.
Chinese firms are racing to secure AI chips. US export curbs are getting tighter. Beijing is also pushing home-grown alternatives to US technology.
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What the Market Is Telling Us About Oracle Stock
If the report is right, it is a good sign for Oracle stock. It shows big customers are willing to sign long, large contracts for Oracle’s AI capacity.
The upfront payment also stands out. On its Q1 call, Oracle said most new contracts come with prepayments or customers bringing their own hardware.
That means Oracle does not have to put up as much of its own cash.
Oracle’s latest results show strong demand.
- Q1 revenue was a record $19.3 billion, up 30%.
- Cloud infrastructure revenue jumped 121% to $7.4 billion.
- Oracle closed more than $30 billion in new AI contracts in the quarter.
- Management raised its full-year revenue guidance to at least $90 billion.
But Oracle stock comes with risks too. Capital spending was $28 billion in Q1. Free cash flow was-$5 billion.
Oracle expects full-year capital spending of $90 billion to $95 billion. Gross margin also fell as new data centers ramped up.
So the story for Oracle stock is demand versus cost. Deals like this one support the demand side.
Investors will still watch spending closely. Since the report is not confirmed, Oracle stock may react more to official comments than to the headline.
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So what is Oracle stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
