Analyst on Oracle (ORCL): 'When Stocks Go Parabolic, There Is Never a Good Outcome'

We recently published 10 Stocks Moving On Key Analyst Calls. Oracle Corp (NYSE:ORCL) is one of the stocks analysts were recently talking about.

Joseph Terranova, Senior Managing Director at Virtus Investment Partners, talked about ORCL’s surge during a CNBC program on September 25. The analyst at the time said that ORCL showed a “parabolic” move, and such moves usually don’t end well.

“I think you have to look at the actual indicators to suggest that it’s beginning to occur. I think it’s a combination of everything. I think it’s a combination of 97, 99, 2021 markets go to extremes. In the case of  Oracle Corp (NYSE:ORCL), you’re talking about a stock that rallied aggressively from April. But yeah, what happened on September 10th, the stock went parabolic and when stocks go parabolic, there is never usually a good outcome to that. Generally, that is a top.”

Oracle soared last month on news of the company's deal with OpenAI. However, the stock recently wavered amid reports that the company’s AI Cloud margins are weak.

Why are some analysts reluctant about the Oracle-OpenAI deal? OpenAI is expected to burn about $115 billion over the next four years and is not projected to be profitable until 2030. Even after Nvidia’s latest $100 billion investment by Nvidia,  OpenAI will likely need to raise over $200 billion in total funding to cover its commitments. Some analysts believe Oracle may need to borrow tens of billions to build enough data centers for the deal.

Clearbridge Global Value Improvers Strategy stated the following regarding Oracle Corporation (NYSE:ORCL) in its second quarter 2025 investor letter:

“Oracle Corporation (NYSE:ORCL) was the leading contributor to relative returns during the quarter. Oracle also saw its share price lifted by a combination of strong quarterly earnings, surging cloud and AI momentum and news of a new contract that would significantly raise revenues when begun in 2028.”

While we acknowledge the potential of ORCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.