Oracle Stock Pops as Citi Calls 54% Decline an 'Extreme Dislocation' — Reddit Debates the AI Trade's Pulse

Oracle shares jumped 4.5% after Citigroup issued a bullish note calling the stock's 54% decline an extreme dislocation and buying opportunity.
On Reddit, ORCL ranked among the top discussed tickers as a heated debate about the AI trade's viability played out on r/wallstreetbets.
Citi estimates Oracle's GAAP profits could triple or quadruple by 2030, with a potential stock price target of $330 per share.

Oracle Corp

$ORCL shares popped 4.5% on Wednesday after Citigroup issued a bullish note arguing that the stock's 54% decline from its June to July peak represents an extreme dislocation and a buying opportunity. The call landed as Reddit's r/wallstreetbets community engaged in a vigorous debate about the health of the AI trade, with ORCL surfacing as a key name in the discussion.

Citi's Bullish Bet on Oracle

The Motley Fool reported that Citigroup's note highlighted Oracle's massive $85 billion backlog as sufficient to cover cash needs, despite concerns about negative free cash flow projections of $90 billion over the next two years. The bank estimates Oracle's GAAP profits could triple or quadruple by 2030, with a potential stock price target of $330 per share. The analyst argued that demand for AI services is insatiable, pushing back against fears that Oracle's massive AI infrastructure spending is unsustainable.

ORCL

Reddit Debates the AI Trade's Pulse

On r/wallstreetbets, a highly upvoted post argued that the AI trade is dead, citing a lack of profitability from large language models and predicting a market downturn as private equity and tech giants offload their AI investments. The post, which garnered over 3,100 upvotes and more than 1,000 comments, claimed that cutting-edge AI models are mostly good at making existing products like Minecraft and Tinder clones, and that companies have already switched back to subscription models rather than paying high token prices.

The author positioned themselves with puts on several tech and AI-related stocks, including

$ORCL, anticipating a rug pull on retail investors. This bearish sentiment stood in stark contrast to Citi's bullish note, highlighting the deep divide in market opinion about Oracle's AI prospects.

Broader AI Infrastructure Context

What Retail Investors Are Watching

Oracle's 4.5% pop on Wednesday suggests that at least some investors are buying Citi's argument that the selloff was overdone. However, the Reddit debate underscores persistent skepticism about whether Oracle's massive AI infrastructure bet will pay off. With the stock still down significantly from its peak, the next few weeks could be pivotal as Oracle reports earnings and provides updates on its AI backlog.

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