Oracle Stock Just Plunged to a 52-Week Low, but Should You Buy the Dip? The Answer Might Surprise You.
Oracle has significant debt, and one of its top customers might struggle to meet its obligations.
Overview
Developing artificial intelligence (AI) software requires substantial computing power, which is usually delivered through data centers that house thousands of specialized chips and components. Most businesses don't have the financial resources to build this infrastructure, so they rent it from cloud providers like Oracle (NYSE: ORCL) instead.
Oracle's data centers are among the fastest and most cost-efficient in the AI industry, so the company has amassed an order backlog of $638 billion from customers waiting for more capacity to come online. However, there are concerns that some of these customers won't be able to fulfill their commitments, which is concerning because Oracle has taken on a truckload of debt to build more infrastructure.
Details
Oracle stock is currently down 62% from its all-time high, and hit a fresh 52-week low last Friday. Could this be the ultimate buying opportunity, or are the risks simply too high?
Source
Originally published at www.fool.com.