Now, I’ve seen a good many bubbles in my time – land schemes in Missouri, railway stocks that promised the moon, even a fellow once tried to sell me swampland in Florida as beachfront property. This here fascination with these “artificial intelligences” strikes me as a bit the same. A whole heap of excitement over contraptions that, let’s be honest, are still mostly figuring out how to tie their own shoelaces. Folks are throwing money at ’em like they’re going out of style, and the companies building these marvels are spending capital faster than a politician spends promises. They’re borrowing, you see, piling on debt to build these…well, these thinking machines. Whether the returns will justify the expense? That’s the question, isn’t it? A gambler’s question, if ever there was one.
But a fella can’t entirely ignore opportunity, even when it smells a bit like snake oil. Most of the wise men on Wall Street – and there are a few, hidden amongst the rogues – reckon the sell-off has been a bit overdone. They see a couple of prospects worth a closer look. So, I’ve been doing my own poking around, and here’s what I’ve found, presented as a friendly wager, if you will.
Microsoft
It always gives me a chuckle to see a behemoth like Microsoft (MSFT 1.57%) get its knickers in a twist. They’re already running a powerful empire, doing all sorts of things without needing these newfangled intelligences. But they’re diving in headfirst, naturally, because if somebody else strikes gold, they want a claim too. They’re expected to be one of the biggest beneficiaries of this “fourth industrial revolution” – a fancy name for progress, if you ask me, and progress usually comes with a hefty price tag.
The trouble is, they’ve been spending money like water. Over seventy-two billion dollars in capital expenditures, they’ve sunk into this venture already, and it’s still going up. They’re buying up all the graphics processing units and building data centers faster than you can say “binary code.” It’s a sight to behold, if you’ve a fondness for grand displays of ambition – and a deep pocketbook.
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Jefferies’ Brent Thill, a man who knows a thing or two about these matters, recently reiterated his buy rating, predicting a price of $675. He sees Microsoft’s platform – those 450 million subscribers and their Azure cloud – as a key advantage. And he reckons the stock isn’t overly expensive, trading at about 21 times projected earnings. A reasonable valuation, if you ask me.
Copilot might be a bit slow out of the gate, but it could still surprise us. And Microsoft’s diversified businesses offer a bit of protection, should this AI craze turn out to be just another flash in the pan. A sensible bet, perhaps, for a cautious gambler.
Oracle
Now, Oracle (ORCL 2.54%) is a cloud provider that’s been riding a bit of a rollercoaster these past six months. They had a blockbuster earnings report in September, boasting over $450 billion in future contracts. The stock soared. But then it came out that a big chunk of those contracts came from OpenAI, who were signing deals with everyone and their brother. Folks started worrying about debt and margins, and the stock came tumbling down. A familiar story, wouldn’t you say?
But Oracle recently beat expectations again, raising their revenue guidance by a billion dollars. They also reported strong cloud revenue and a healthy backlog, which seemed to calm the nerves of the investors. It’s a volatile situation, to be sure, but there’s potential there.
Twenty-eight out of thirty-two analysts have a buy rating, and they’re predicting a price jump of around 54%. Deutsche Bank’s Brad Zelnick recently reiterated his buy rating, despite lowering his price target. He’s encouraged by their recent bond offering and OpenAI’s financing round. A positive sign, if you’re looking for one.
Now, I’ll admit, I’m not sure what the future holds for this AI business. Will it keep accelerating, or is a slowdown inevitable? If OpenAI fulfills its contract with Oracle, the stock should certainly climb. But it’s a big “if.” Oracle’s stock is down 46% in the past six months, and it’s trading at about 22 times forward earnings. The risk-reward proposition has improved significantly.
I reckon a small position might be worth considering. The upside could be immense, and even a cautious gambler can appreciate a good long shot. After all, fortune favors the bold…and sometimes, the slightly foolish.
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2026-03-14 20:03