[Click eStock] "Oracle Plunge in U.S. ... Buying Opportunity for Domestic Memory Semiconductor Sector"

"Oracle's Correction Not an Industry-Wide AI Issue"
"A Process of Sorting Companies by Investment Structure and Financial Strength"

Securities analysts have suggested that the recent sharp decline in shares of Oracle, a U.S. artificial intelligence (AI) cloud service company, could actually present a prime buying opportunity for AI-related stocks.

On December 19, Lee Surim, a researcher at DS Investment & Securities, stated, "The current correction phase is a buying opportunity for investors confident in the growth of the AI industry. With the recent correction, valuation pressures have eased for AI stocks such as Nvidia and Broadcom. We recommend buying domestic memory semiconductor stocks related to these AI names."

Regarding Oracle's recent share price drop, Lee explained, "Rather than simply reflecting negative news or a collapse of the trend, this is a process in which the market's standards for AI investment are being raised to a new level." He diagnosed, "Oracle is an example of a company that belatedly made aggressive investments to catch up with AI demand, resulting in a weakened financial structure."

He further pointed out, "Although Oracle is growing rapidly, the company had to make excessive capital expenditures compared to the relatively small absolute scale of its Oracle Cloud Infrastructure (OCI) revenue. In contrast, major cloud providers such as Microsoft, Amazon Web Services (AWS), and Google are able to invest in infrastructure based on years of accumulated workloads, stable free cash flow, and a large customer base."

Lee also dismissed interpretations that the current Oracle issue signals a collapse in overall AI industry demand or the bursting of a bubble. He emphasized, "The essence of the current correction is not a slowdown in AI demand itself, but rather a process of distinguishing between companies in terms of investment structure and financial strength. Demand prospects remain strong in key value chains such as AI servers, graphics processing units (GPUs), and high-bandwidth memory (HBM). Major cloud providers are not withdrawing or scaling back their AI capital expenditure plans."

He added, "Microsoft, AWS, and Google are already making investments based on their large-scale AI workloads and customer bases, and AI is gradually being monetized as an extension of their existing cloud revenues."

Additionally, Lee recommended buying domestic memory semiconductor stocks related to AI names such as Nvidia and Broadcom, which have seen their valuation burdens eased by the recent correction, while presenting a clear outlook for monetization paths in the AI market. He stated, "Short-term volatility is inevitable, but in the long run, stock prices will rebound, centering on companies with competitive advantages in AI."