Legendary investor Michael Burry has turned bearish on Oracle (ORCL), famous for his bet against the U.S. housing market. Oracle’s AI push led to gains, but growing leverage and execution risks are concerning. Burry’s bearish position raises eyebrows, questioning the sustainability of the AI boom and Oracle’s future prospects.

Oracle is a global tech leader offering cloud infrastructure, software, and hardware. Known for its flagship product, the Oracle Database, the company provides AI-powered enterprise applications. With a market cap of $570.4 billion, Oracle’s stock performance has been mixed, with concerns over debt and revenue conversion from backlog.

Burry, of “The Big Short” fame, disclosed a bearish position on Oracle, citing rising debt and execution risks. The company’s heavy capital spending on AI data centers has led to significant borrowings, with $95 billion in outstanding debt. Concerns abound regarding Oracle’s ability to deliver returns on its massive AI investments.

Oracle’s aggressive pivot to AI data centers involves billions in new investments, reflected in rising capital expenditures. The company’s heavy debt load raises financial risks, with credit default swap costs surging post-earnings. While the backlog is impressive, concerns linger about revenue conversion speed and customer concentration risks tied to AI partners like OpenAI.

Despite Oracle’s impressive backlog growth, concerns persist about revenue conversion speed and customer concentration risks. The company’s debt-fueled AI investments raise questions about returns, leading to a cautious “Hold” recommendation on ORCL stock. Analysts are mostly bullish on Oracle, with a consensus “Moderate Buy” rating and a mean price target of $304.03.

In conclusion, Michael Burry’s bearish stance on Oracle highlights concerns about the company’s debt and ability to convert backlog into revenue. While analysts are predominantly bullish on ORCL stock, caution prevails due to the challenges posed by Oracle’s heavy AI investments and financial risks.

Read more at Yahoo Finance: Legendary Investor Michael Burry Is Betting Against Oracle Stock. What You Need to Know About the Bear Case for ORCL.