This Artificial Intelligence (AI) Stock Appeared Destined for the $1 Trillion Club. Here's Why It Lost Momentum.

Oracle's data centers are highly sought after by artificial intelligence (AI) powerhouses like OpenAI, because of their fast processing speeds and low cost.

Oracle has an order backlog worth $638 billion from customers who are waiting for more data centers to come online, but I see a few issues with that number.

Oracle stock is down 44% from last year's record high, but it isn't necessarily cheap.

As I write this, 12 publicly listed American companies have a market capitalization of $1 trillion or more, with SpaceX being the newest member of the prestigious club. Software and cloud infrastructure giant, Oracle (NYSE: ORCL) , was tantalizingly close to joining them late last year when its market cap topped $935 billion, but its stock has since hit a wall.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

Oracle operates some of the fastest, and most cost-efficient data centers for artificial intelligence (AI) training and inference workloads, and it has a gigantic order backlog for computing capacity worth $638 billion. However, there is a real possibility that some of Oracle's top customers won't be able to fulfill their obligations, so investors are treading with caution.

Oracle stock is down 44% from its all-time high, and here's why the dip might not be a buying opportunity.

Oracle is building data centers as fast as it can to fill demand for computing capacity from its AI customers, which include OpenAI , Meta Platforms , and Elon Musk's xAI, to name a few. It fills these data centers with thousands of specialized chips called graphics processing units ( GPUs ), which are supplied by Nvidia and Advanced Micro Devices .