Goldman Sachs (GS) partner John Flood says that if the AI trend continues to shape the stock market, then investors may need to focus more on tech giant Oracle (ORCL) instead of chipmaker Nvidia (NVDA). Flood explained that Oracle’s credit default swap prices (the cost to insure against the company’s debt) have tripled. That increase has turned Oracle into a key indicator for AI-related risk by attracting traders who want protection.
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Flood added that credit concerns are growing for major cloud companies, known as hyperscalers. These firms are spending heavily on data centers, and their capital spending is beginning to exceed their cash flow, which could push them to take on more debt. After Thursday’s sharp market reversal, investors are now trying to reduce crowded trades and protect their profits before the year ends. As a result, this cautious approach reflects a defensive mindset, rather than panic.
This idea is in line with comments made by Nomura’s Charlie McElligott earlier this week. He said that the recent market pullback isn’t a warning of economic trouble but rather traders locking in gains after a strong year driven by AI stocks. He called it rational profit protection, not fear, and still expects a bullish outlook for 2026. Flood also noted that in the eight times since 1957 when the S&P 500 (SPY) opened up more than 1% but closed down, the index bounced back afterward, rising an average of 2.3% the next day, 2.9% after a week, and 4.7% after a month.
Is ORCL Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 25 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 $352.52 per share implies 79% upside potential.
