ORCL估值合理；不可抗力事件凸显流动性压力以及到2028年的负自由现金流，抵消了增长潜力。

We have some unfortunate news for Oracle stock investors, as the company has declared a "force majeure" event. Let's take a closer look at the details and why Oracle's stock fell by about 4% following that news.

I will keep you updated on my ratings for Oracle, whether it's to buy, hold, or sell. I just updated my fair value estimate for Oracle stock today.

We will gain a deeper understanding of the entire artificial intelligence system and how Oracle, as one of the most leveraged companies in the field, is affected.

Oracle has issued a "force majeure" notice for its 2.45-gigawatt site in New Mexico, known as "Project Buyer," according to a Bloomberg report.

The site is linked to the "Star Date" initiative with "OpenAI" and "SoftBank", with "OpenAI" acting as a client. It is important to note that Oracle and OpenAI have arrangements worth hundreds of billions of dollars.

The two companies are closely linked, as the success of one of them, OpenAI, could lead to great success for Oracle. The notice was sent to the project developer, the private credit company "Blue All Capital".

It is an attempt to defer payments in case the "buyer project" fails to get up and running by 2028. This is why Oracle's stock price has fallen by about 4%; Not because of the event itself, but because of what it might lead to later.

For a company like Oracle, which relies heavily on leverage, even a small change in circumstances leads to a significant change in the share price. Therefore, they also said that "Project Buyer" is still proceeding according to the planned schedule.

However, despite those reassurances, investors pushed Oracle's shares down.

The stock plummeted by more than 4% following this news. Again, the reason is that Oracle is in the most precarious cash position of all the cloud computing giants, according to KeyBank analyst Jackson Adair.

Such issues may be widespread, but Oracle feels the impact more acutely than its larger, more liquid counterparts. Oracle relies heavily on borrowing, with tens of billions of dollars in debt on its balance sheet.

Free cash flow is expected to remain negative for several more years.

Thus, when such a situation occurs for Oracle, the impact on the stock price is greater than it might be for a larger and more stable company. As I mentioned, I just updated my fair value estimate for Oracle, and as part of that, I revised the company's cash flow estimates.

Now, something positive has happened with Oracle in recent quarters, which is that it is receiving more deposits from new customer applications. Previously, the company signed contracts worth tens or perhaps hundreds of billions of dollars, and those contracts were for computing power consumption orders built by Oracle.

However, Oracle has almost exhausted all of its cash reserves and borrowing capacity.

It now requires some customers who are looking to order and secure supplies of this computing power to pay a deposit, i.e., to make an advance payment on the order they are placing.

In recent chapters, these deposits have been substantial, amounting to billions of dollars.

This helps with the initial investment to build these data centers because it's a matter of timing. This timing issue works against Oracle's interests. They spend tens and hundreds of billions of dollars to build these data centers upfront, and then receive the cash flow spread over several years.

This creates a liquidity strain, which I estimate will cause the company to generate negative cash flow of $25 billion in 2026, negative $37 billion in 2027, and negative $32.6 billion in 2028.

These are my revised estimates after the company began receiving these deposits. I have actually reduced the negative numbers. So, it's not as negative as it was before my update today.

It has been adjusted to increase by billions of dollars each year for the next three years.

But I expect a return to positive cash flow starting in 2029, when Oracle will slow down its investments and begin to reap the rewards of data centers that will come online and generate profits.

Accordingly, I have updated my fair value estimate for Oracle stock to $131, compared to its market price of $139 at the time of recording this video. With the safety margin applied, Oracle stock appears to be fairly valued according to my discounted cash flow estimates.

Looking at Oracle based on a forward price-to-earnings ratio of 12.71, the stock seems undervalued, doesn't it? It is even cheaper than it was in 2024, before revenue growth accelerated, and before they had hundreds of billions of dollars more in backlogged data computing demands.

It is actually trading at a lower valuation than that. This illustrates the nature of the risks surrounding Oracle. The cash flow position has improved with respect to the fair value estimation of all discounted cash flows expected to be realized from now until the very long term.

This cash flow has actually become larger. But what is even bigger than the increase in cash flow is the increase in risk.

Since 2024, the position of OpenAI, one of Oracle's largest customers, has become more precarious. Anthropic has grown to a leading position, while OpenAI has postponed its initial public offering.

OpenAI has contracts with Oracle worth hundreds of billions of dollars. Therefore, Oracle's performance in terms of valuation and share price tends to follow the path of OpenAI.

In general, to answer the question I posed in the introduction, does Oracle stock look like a buying opportunity? I think so.

I believe it still represents a buying opportunity when considering the risks versus the returns, but my level of confidence and conviction in this rating is low.