Oracle Corp: Between Wall‑Street Hyperbole and Quiet Capital Moves

Oracle Corporation’s stock closed at $236.15 on 10 November, still far below its 52‑week high of $345.72 but well above the low of $118.86 set in April. With a market cap of $670 billion and a price‑earnings ratio of 55.7, the software behemoth is trading at a premium that many investors accept as a price for its dominant position in enterprise databases and cloud services. Yet the latest buzz—most notably the scathing critique from hedge‑fund legend Michael Burry—casts a shadow over that premium.

Burry’s Accusation: “Depreciation Gimmicks” and 27 % Overstatement

On 12 November, a post on BitcoinEthereumNews.com reported that Burry claimed Oracle would overstate earnings by 27 % due to what he called a “depreciation gimmick.” This accusation echoes Burry’s earlier warning on TipRanks that AI valuations are rife with “accounting tricks,” and his claim that the earnings boom in the AI sector may be built on fraudulent accounting.

Oracle’s earnings are largely driven by software licensing and subscription services, with depreciation charges applied to its data‑center infrastructure and capital‑intensive hardware. Burry’s critique suggests that Oracle is capitalizing too aggressively on depreciation, thereby inflating net income. If true, the 55.7x P/E would be an even more misleading valuation metric, further eroding confidence among risk‑averse investors.

The Reality Behind the Numbers

Oracle’s financial statements, however, show a disciplined approach to capital expenditure and a steady shift toward cloud‑based revenue. The company’s historical growth has been less about one‑off accounting adjustments than about recurring subscription fees. Moreover, the 27 % figure, if applied to Oracle’s current earnings of roughly $5.3 billion (2024), would represent an adjustment of $1.4 billion—a substantial amount that would bring the P/E down to 39.2x, a figure still high but not implausible for a leading enterprise software firm.

Burry’s claim is therefore a provocative headline but not yet substantiated by concrete evidence. The market’s reaction—if any—has been muted, suggesting that analysts either disagree with the assessment or believe the adjustment is already factored into the price.

A Quiet Capital Raise by Oracle Commodity Holding

In unrelated news on 10 November, Oracle Commodity Holding Corp. (OTCQB: ORLCF, TSXV: ORCL) closed a non‑brokered private placement of 8 million units at $0.035 each, raising $280,000. While the ticker similarity is striking, this entity is a distinct, commodity‑focused company unrelated to Oracle Corp’s software operations. The transaction does not affect Oracle Corp’s balance sheet or stock price but underscores the potential for brand confusion in the market.

Oracle Health CommunityWorks and Hospital Adoption

Another 10 November article reported that Baraga County Memorial Hospital had chosen Oracle Health CommunityWorks to enhance clinician workflows. This adoption highlights Oracle’s expanding footprint in healthcare IT—a sector poised for digital transformation. The partnership may drive incremental revenue and reinforce Oracle’s position as a multi‑industry software provider.

Market Sentiment and the AI Boom

Oracle’s stock sits within the broader context of an AI‑driven market rally. While companies like AMD predict aggressive growth in AI chip demand, Oracle’s strategic focus remains on cloud infrastructure and data‑management solutions. The company’s high valuation could be justified by its role in enabling AI workloads, but Burry’s critique reminds investors that earnings quality must be scrutinized even in high‑growth segments.

Bottom Line

Oracle Corp trades at a premium that reflects expectations of continued dominance in enterprise software and cloud services. Michael Burry’s assertion of a 27 % earnings overstatement—centered on depreciation accounting—poses a legitimate but unproven challenge to that premium. The company’s recent modest capital raise by Oracle Commodity Holding and its growing healthcare IT partnerships add layers to Oracle’s business narrative but do not materially alter its valuation fundamentals. Investors must weigh the potential accounting adjustment against Oracle’s proven revenue model and its strategic positioning in a technology landscape that increasingly values data‑centric solutions.