📌 Oracle’s Valuation Depends on OpenAI’s Ability to Pay
Oracle’s low valuation and expectations for high earnings-per-share growth over the next two years cannot be assessed solely by looking at OCI orders and the growth figures in its financial reports. The more critical question is whether its important customer, OpenAI, can continuously convert enormous computing-power demand into long-term, payable procurement.
One view estimates that OpenAI will consume USD 278 billion in free cash flow and invest USD 856 billion in computing power and infrastructure between 2026 and 2030. If this projection is close to reality, it indicates that demand for AI infrastructure is still expanding, and also means that OpenAI needs to continuously secure large-scale financing. For Oracle, this could bring revenue growth, but it also ties part of its growth expectations to a single customer’s financing capacity, ability to perform, and the persistence of its demand.
Another view holds that Oracle’s earnings per share may grow by 35% to 45% over the next two years, while its valuation has already approached single digits; the author also views the post-earnings share-price decline as an opportunity to build a position. The premise of this judgment is not merely that Oracle continues to deliver growth, but also that OpenAI’s long-term capital commitments can turn into stable payments. If financing arrangements or the pace of investment fall short of expectations, even a large order volume may not necessarily translate proportionally into Oracle’s revenue, profit, and cash flow.
Therefore, Oracle’s discount may not merely reflect the market overlooking growth; it may also reflect the uncertainty brought by customer concentration. What needs to be verified going forward is not whether AI demand exists, but whether the sources of funding on the demand side can cover its long-term infrastructure bills.
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