Bloomberg Tech Oracle Slides by Most Since January on Mounting AI Spending
10 snips
Dec 11, 2025 Joining the discussion is Alex O'Kinn, a managing director at Wolfe Research specializing in enterprise software. He breaks down Oracle’s significant increase in AI spending and the resulting market reaction, describing it as a timing mismatch rather than a failure. The conversation also covers Disney's $1 billion investment in OpenAI and the implications for the entertainment industry. Additionally, they explore the ongoing debate about AI spending risks and the long-term productivity potential of these advances.
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AI Build-Out Creates Timing Mismatch
- Oracle's big AI infrastructure build-out is driving massive upfront capital expenditure that outpaced Street expectations this quarter.
- Revenue recognition from those investments is delayed, creating investor anxiety despite strong cloud growth.
Treat Oracle's Drop As Timing, Not Doom
- Do view current weakness as a timing issue rather than a structural failure if you believe compute demand is insatiable.
- Watch for clear evidence of cloud/IaaS outperformance before revisiting higher price targets.
Disney Turns IP Into AI Leverage
- Disney's $1 billion OpenAI investment plus licensing of 200+ characters signals studios will monetize IP via generative AI partnerships.
- The deal is time-limited and positions Disney to pressure other tech rivals into agreements.
