Does TikTok Data Oversight Deal Reshape the Bull Case for Oracle’s AI Cloud Story (ORCL)?

• In recent days, TikTok’s parent ByteDance agreed to form a U.S.-based joint venture with Oracle, Silver Lake, and MGX, under which Oracle will oversee TikTok’s U.S. data protection, content moderation, and algorithm security while hosting the platform on its cloud infrastructure.
• This agreement not only expands Oracle’s cloud workload with a high-traffic consumer app, it also elevates the company’s role in U.S. digital governance and national security-sensitive data oversight.
• We’ll now examine how overseeing TikTok’s U.S. data and algorithm security could reshape Oracle’s AI-driven cloud growth narrative and risk profile.

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Oracle Investment Narrative Recap

To own Oracle today, you have to believe its massive AI and cloud buildout will translate into sustained revenue from long-term contracts, not just hype. The TikTok joint venture reinforces that narrative by adding a large, non‑AI consumer workload, but it does not materially change the near term picture where the key catalyst remains converting RPO into realized cloud revenue, and the biggest risk is still Oracle’s heavy, debt funded data center expansion and timing of returns.

Among recent announcements, Michigan regulators approving DTE Energy’s power deal for Oracle and OpenAI’s Stargate data center stands out, because it goes straight to that same near term catalyst and risk pair: enabling Oracle to fulfill huge AI contracts while simultaneously magnifying its capital intensity, lease obligations, and reliance on successful AI monetization.

Yet investors should also weigh how Oracle’s aggressive multi year CapEx and rising debt could affect returns if AI workloads or TikTok usage do not scale as expected...

Read the full narrative on Oracle (it's free!)

Oracle’s narrative projects $99.5 billion revenue and $25.3 billion earnings by 2028. This assumes 20.1% yearly revenue growth and an earnings increase of about $12.9 billion from $12.4 billion today.

Uncover how Oracle's forecasts yield a $342.28 fair value, a 78% upside to its current price.

Exploring Other Perspectives

Thirty members of the Simply Wall St Community currently see Oracle’s fair value anywhere between about US$164 and US$400, with clusters across the mid US$200s to low US$300s. Against that wide spread of opinions, Oracle’s reliance on converting a very large AI driven RPO backlog into actual cash earnings highlights why different investors may reach very different conclusions about its future performance.

Explore 30 other fair value estimates on Oracle - why the stock might be worth over 2x more than the current price!

Build Your Own Oracle Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Oracle research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Oracle research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Oracle's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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