Tech giant Oracle (ORCL) is delaying the completion of several data centers it’s building for AI firm OpenAI (OPAIQ), thereby pushing the timeline from 2027 to 2028, according to Bloomberg News. The delays are mainly due to shortages in labor and materials, based on comments from people familiar with the matter.
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These centers are part of a $300 billion deal that Oracle signed earlier this year to supply computing power for OpenAI’s artificial intelligence models. Nevertheless, even with the setbacks, the U.S.-based data centers are still on a fast-track schedule, especially when considering that they are expected to be among the largest in the world. However, investor worries about slow returns from massive AI investments have already hurt Oracle’s stock.
After a 13% drop earlier in the week, the stock fell again today following the news of the delays. Still, not all progress is stalled. Oracle Co-CEO Clay Magouyrk confirmed during an earnings call that construction on the first data center in Abilene, Texas, is going well, with over 96,000 Nvidia (NVDA) chips already delivered for use in OpenAI’s projects.
Is Oracle a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 22 Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $302.10 per share implies 59.7% upside potential.
