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    Oracle’s AI Data Center Splurge and TikTok Role Might Change The Case For Investing In Oracle (ORCL)

    Simply Wall St·01/07/2026 17:37:24
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    • In recent months, Oracle has ramped up capital spending to build AI-focused data centers, signed multi-billion dollar cloud deals with partners such as OpenAI, Nvidia and Meta, and taken a leading role in TikTok’s U.S. operations to channel more AI workloads onto Oracle Cloud Infrastructure.
    • This aggressive push has made Oracle a central test case for whether massive AI infrastructure commitments and a very large contracted backlog can be converted into durable, profitable cloud revenue without straining its balance sheet.
    • We’ll now examine how Oracle’s heavier AI infrastructure spending, and the debt and utilization questions it raises, reshape the company’s investment narrative.

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    Oracle Investment Narrative Recap

    If you own Oracle today, you broadly have to believe that its huge AI data center buildout and US$523 billion-plus cloud backlog can turn into sustainable, high-margin revenue without stressing an already leveraged balance sheet. The latest news around heavier AI capex and debt worries keeps the near term focused on one main catalyst: how quickly Oracle can fill new capacity with profitable AI workloads, while the biggest immediate risk is underutilized infrastructure sitting on its own books.

    Among the recent developments, Oracle’s decision to join the investor group leading TikTok’s U.S. operations stands out, as it is explicitly tied to routing more AI and data workloads onto Oracle Cloud Infrastructure. For shareholders watching how fast the massive RPO converts into cash, this potential TikTok-driven traffic sits alongside large OpenAI and Nvidia contracts as a key proof point that Oracle’s expanded AI infrastructure can attract diversified, recurring demand.

    Yet beneath the AI excitement, investors should be aware of Oracle’s reliance on a few large AI customers and what happens if...

    Read the full narrative on Oracle (it's free!)

    Oracle's narrative projects $99.5 billion revenue and $25.3 billion earnings by 2028. This requires 20.1% yearly revenue growth and roughly a $12.9 billion earnings increase from $12.4 billion today.

    Uncover how Oracle's forecasts yield a $342.28 fair value, a 77% upside to its current price.

    Exploring Other Perspectives

    ORCL 1-Year Stock Price Chart
    ORCL 1-Year Stock Price Chart

    Twenty eight members of the Simply Wall St Community place Oracle’s fair value anywhere from about US$165 to US$400 per share, underlining how far apart individual views can be. As you weigh those opinions against Oracle’s heavy AI related capex and debt load, it is worth considering how different assumptions about demand for its data centers could feed through to future returns.

    Explore 28 other fair value estimates on Oracle - why the stock might be worth over 2x more than the current price!

    Build Your Own Oracle Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.