Wedbush cries out "the market is wrong": OpenAI panic is a "fake fall"! Oracle Corporation (ORCL.US) sees a buying opportunity after a sharp decline.

As the report of OpenAI failing to meet its internal user and revenue targets continues to ferment, technology stocks deeply associated with it have experienced intense selling. However, in its latest research report, Wedbush Securities clearly pointed out that the market's panic has deviated significantly from the fundamentals - this is not just an "overreaction", but also a "prime buying opportunity" for companies like Oracle Corporation(ORCL.US) that are highly correlated with AI infrastructure leaders. Wedbush's "missed killing" logic: market panic and fundamental disconnect Illusion of slowdown: Wedbush analysts made it clear that they "strongly oppose" the argument of OpenAI's growth slowdown. The institution observed that OpenAI maintains "very high demand" on both the consumer and enterprise side. The institution believes that after recently raising $122 billion in financing, OpenAI now has at least three years of ample budget for purchasing of computing power, implying that its capabilities are not under substantial crisis. Order iron curtain: Wedbush also emphasized Oracle Corporation's cornerstone - of its remaining obligations of up to $553 billion, about $300 billion come from a five-year cloud computing power agreement signed with OpenAI. This contract provides Oracle Corporation with unprecedented revenue visibility, giving it strong defensive properties when compared with peers. Valuation opportunity: The institution not only reiterated its "outperform market" rating for Oracle Corporation, but also explicitly maintained a target price of $225 - which, based on the current stock price, implies over 30% upside. The stock has fallen by 38% in the past six months, and Wedbush believes that the current valuation has provided investors with a significant discount safety margin. Ample funds: Wedbush analysts explained that both companies have recently raised funds, especially Oracle Corporation, and their conditions are positive. Oracle Corporation is planning to raise $50 billion through debt and equity financing, while OpenAI recently raised $122 billion from numerous investors. It is worth noting that Wedbush's overall assessment of Oracle Corporation's AI strategy is not a sudden decision. Last week, the institution first included Oracle Corporation in its coverage range, giving it an "outperform market" rating and a target price of $225, pointing out that Oracle Corporation's capital expenditures are contractually secured rather than speculative - with its capital expenditures versus RPO ratio at around 9%, significantly lower than the industry average of about 45.6%. A "bloodbath" triggered by a report The trigger for this round of selling sentiment was a report on Tuesday revealing that OpenAI recently failed to meet its set new user and revenue targets. ChatGPT chat Siasun Robot&Automation failed to achieve its internal goal of 1 billion active users per week by the end of 2025, while in programming tools and the enterprise market, OpenAI is facing increasingly strong competition from rivals like Anthropic, who highly praise their Claude AI model. User churn remains a challenge, as ChatGPT chat Siasun Robot&Automation failed to achieve its internal goal of 1 billion active users per week by the end of 2025. Meanwhile, Alphabet Inc. Class C's Gemini AI model saw a significant increase in popularity last year, with a substantial growth in user numbers, eroding OpenAI's market share. It is worth noting that Alphabet Inc. Class C's catch-up with OpenAI is also reflected in a series of stocks associated with Alphabet Inc. Class C. Data show that in recent months, a basket of stocks related to OpenAI has significantly underperformed the industry. Since the end of 2024, this group of stocks has accumulated about a 75% increase, while a similar group of stocks related to Alphabet Inc. Class C has increased by over 300% during the same period. After the news was released, the US AI sector as a whole saw a sell-off. On Tuesday, Oracle Corporation plunged 7.7% to $159.80 before market open, closing down more than 4%; CoreWeave (CRWV.US) fell 7.4% to $104 before the market opened. SoftBank Group in Japan closed down nearly 10% in Tokyo, marking its largest single-day decline since November last year, with a further 12.11% drop in the US OTC market. NVIDIA Corporation (NVDA.US) fell 1.63%; Broadcom Inc. (AVGO.US) and AMD (AMD.US) both fell by more than 3%. The Nasdaq Composite Index fell 0.90%, the S&P 500 fell 0.49%, and the Dow Jones index fell slightly by 0.05% - companies highly associated with OpenAI constituted the core pressure in this round of decline. Although Wedbush takes a clear bullish stance, the market's panic is not unfounded. According to sources, OpenAI's CFO Sarah Friar has expressed concerns to the company's executives: if revenue growth does not accelerate sufficiently, the company may not be able to meet its massive computing power procurement obligations to Oracle Corporation and other companies in the future. This CFO-level internal warning injected structural uncertainty into the market. At the same time, OpenAI and Oracle Corporation's flagship data center expansion plan at the "Stargate" in Abilene, Texas officially fell through in March of this year due to stalled financing negotiations. The project originally planned to increase the data center's capacity from 1.2GW to nearly 2GW, but is now shelved, with Meta considering taking over the related expansion project. This fact reminds investors that although the RPO contract numbers are large, there is still a gap between "contract signing" and "actual demand fulfillment". Bulls and bears debate A fierce debate between bulls and bears has emerged on Wall Street regarding Oracle Corporation's "300 billion dollar gamble". The bullish side, represented by Wedbush, paints a clear logic - the huge backlog of orders provides revenue visibility, ample financing ensures project delivery, and the long-term demand logic remains solid. The deeper support is that Oracle Corporation's massive RPO base allows the company to maintain high defense depth even in the face of short-term demand disruptions. However, the bearish logic is equally sharp. Some market analysts have characterized Oracle Corporation's current situation as "exposure to single customer single point credit risk". As much as 54% of Oracle Corporation's RPO is concentrated on OpenAI as a single customer, and when even the top management of this "biggest credit pillar" begins to question the company's ability to fulfill its obligations, the possibility of the backlog contract turning from a "moat" into a "risk concentration point" cannot be ignored. In addition, Oracle Corporation has had negative free cash flow for the past four quarters, with long-term debt increasing from $81.3 billion to $130.8 billion in six months - the cost of this bet is a heavy burden on the balance sheet. Regardless, Wedbush analysts countered, stating, "Given that Oracle Corporation's $50 billion financing plan mainly relies on debt financing to support its data center construction, which in turn depends on whether OpenAI can fulfill its procurement commitments on time, we are confident in Oracle Corporation's ability to complete this financing plan. While these concerns are worth noting, we believe that the pullback in Oracle Corporation's stock price is a prime buying opportunity, as OpenAI is expected to go public by the end of this year, which will provide the company with a new source of funding from the public market. We believe that the recent concerns surrounding OpenAI are somewhat overblown, as the company, after raising $122 billion in funding recently, has enough funds to meet its computing needs for at least the next three years, which leads us to believe that Oracle Corporation's backlog orders will be fulfilled in the short term, and its path to going public will also provide it with ample liquidity for its long-term commitments."