As OpenAI was reported to have fallen short of its internal user and revenue targets, technology stocks deeply tied to the company have encountered a sell-off. However, in its latest research report, Wedbush Securities pointed out that the market’s panic has severely diverged from fundamentals. This is not merely an “overreaction,” but rather creates a “golden buying opportunity” for Oracle (ORCL) and other leading AI infrastructure players highly correlated with OpenAI.
Wedbush analysts explicitly stated their “strong disagreement” with the narrative of OpenAI’s slowing growth. The firm observes that OpenAI continues to see “very high demand” on both the consumer and enterprise sides. After recently completing $122 billion in financing, OpenAI now has a budget sufficient for at least three years of substantial computing power procurement. Meanwhile, Wedbush highlighted Oracle’s cornerstone—of its massive $553 billion remaining performance obligations, approximately $300 billion comes from a five-year cloud computing agreement with OpenAI, providing Oracle with unprecedented revenue visibility. The firm reiterated its “Outperform” rating on Oracle and maintained a $225 price target, implying over 30% upside from the current share price. The stock has fallen a cumulative 38% over the past six months, and Wedbush believes current valuation offers a significant margin of safety at a discount. Given that both companies have recently raised funds—Oracle is planning to raise $50 billion through debt and equity financing—its capital expenditures are contractually backed rather than speculative. The ratio of capital expenditures to remaining performance obligations is approximately 9%, far below the industry average of roughly 45.6%.
The trigger for the sell-off was a report disclosing that OpenAI recently failed to meet its new user and revenue targets. ChatGPT did not achieve its internal goal of 1 billion weekly active users by the end of 2025, while simultaneously facing increasing pressure from Anthropic in the programming tool and enterprise markets. User churn remains a challenge, and Google’s Gemini AI model saw a significant rise in popularity last year, eating into OpenAI’s market share. Since the end of 2024, a basket of OpenAI-related stocks has risen approximately 75%, while a similar group of Google-related stocks has gained over 300% over the same period. Despite Wedbush’s distinctly bullish stance, sources familiar with the matter revealed that OpenAI’s Chief Financial Officer has expressed concerns to the company’s senior management: if revenue does not grow quickly enough, the company may not be able to afford its massive computing power procurement obligations to firms like Oracle in the future.
Wedbush analysts stated that, given Oracle’s $50 billion financing plan—primarily through debt to support data center construction, which in turn depends on OpenAI’s ability to fulfill its procurement commitments on time—the firm is confident in the financing capability. Additionally, OpenAI is expected to go public by the end of this year, which would provide a new financing channel from the public markets. The recent concerns surrounding OpenAI are somewhat overblown; the company has sufficient funds to meet its computing power needs for at least the next three years, and Oracle’s backlog orders will be fulfilled in the near term.
