Will Oracle and other "OpenAI Chain" make a comeback in the first half of 2026? This is the prerequisite

Wall Street is currently in a state of extreme anxiety and division: on one hand, the brutal reality of Oracle's stock price plummeting 41% since its mid-September peak, and on the other hand, the bulls' bets on a "stunning reversal" in the first half of 2026.

According to the Wind Trading Desk, on January 4th, UBS clearly pointed out in its latest research report that the market's panic stems from two core issues: one is the extreme distrust in OpenAI's "bottomless money pit" and its ability to fulfill commitments, and the other is the concern over whether Oracle's own balance sheet can sustain an investment-grade rating under aggressive capital expenditures.

If investors believe that OpenAI can roll out GPT-6 or complete a new round of massive financing in the first half of 2026, then Oracle, currently trading at a 34 times PE for CY27, could represent a huge mispricing opportunity. Conversely, if OpenAI succumbs to Google's Gemini's offensive, or if Oracle is forced to dilute shareholders through equity financing, the decline is far from over.

Although UBS has lowered its target price to $280, it still maintains a "buy" rating, which is essentially a gamble on "faith."

Three "Lifelines" for OpenAI's Narrative Reversal

The market's pessimism towards OpenAI has reached its peak, mainly focusing on the slowdown in ChatGPT's growth and the difficulty of monetization on the enterprise side. UBS believes that to reverse Oracle's decline (as its largest infrastructure service provider), one or several of the following three things must happen:

• Capital Injection (most direct): Media reports indicate that OpenAI is seeking to raise $100 billion at an $830 billion valuation, with even Amazon and SoftBank lining up to provide funds. If this money comes through, the so-called "counterparty risk" will vanish instantly.

• Arrival of GPT-6 (most critical): Existing model improvements are viewed by the market as "toothpaste squeezing." UBS believes that only by launching a truly leap-forward update (GPT-6) in the first quarter of 2026 can doubts about Google's Gemini catching up be quelled.

• Enterprise Story Implementation: Currently, 95% of enterprise AI projects are still in the "pilot" stage. The year 2026 must be the year when enterprise AI (especially AI Agents) truly lands and generates revenue, proving that the hundreds of billions of dollars invested in computing power are not in vain.

In summary, as long as OpenAI can secure funding or develop a new model, Oracle can survive; otherwise, this is just a game of hot potato.

Debt Black Hole: Oracle is "Walking a Tightrope"

Investors are most concerned that Oracle, in order to support OpenAI's computing power demands, has bought itself into "junk bonds."

• Surging Leverage: UBS predicts that when accounting for lease liabilities, Oracle's net debt to EBITDA ratio will reach an astonishing 4.0 times by 2027. This is dancing on the edge of a cliff for a company committed to maintaining an investment-grade rating (currently rated BBB by S&P, with a negative outlook)

• Not just buying cards, but also building factories: Lease obligations surged to $248 billion over the past two quarters. This is not just money for buying NVIDIA GPUs, but also includes data center lease contracts lasting up to 15 years. This means that even if OpenAI can't afford to pay, Oracle still has to continue paying rent.

• Financing gap: UBS estimates that Oracle faces a financing gap of about $82 billion from FY26 to FY28.

Oracle's current strategy is "if not now, when," but as soon as rating agencies downgrade their ratings, the rising financing costs will directly eat into profits.

"Off-balance-sheet financing" and "customer-supplied chips": financial magic or a delaying tactic?

Faced with enormous financial pressure, Oracle has started to play with financial engineering.

• Customer-supplied chips (BYOC): Management revealed on the conference call that they are considering allowing customers (like OpenAI) to buy their own chips, with Oracle only responsible for operating the data centers. While this can relieve balance sheet pressure, it also means lower profit margins and lower revenue scale—this has been interpreted by the market as a form of "backing down."

• Off-balance-sheet operations: Collaborating with private credit institutions for GPU sale-leaseback. UBS believes that if 50% of the funding needs are resolved this way, the direct debt financing requirement will be halved to around $40 billion.

Wall Street hates uncertainty. Oracle's vague statements about specific financing plans (not clearly explained to investors or during the earnings call) are one of the core reasons for the stock price plummet.

Abilene Project: The only solid positive news

Among all the bad news, the super data center project located in Abilene, Texas, is the only bright spot.

• Progress exceeds expectations: As of the end of the November quarter, 96,000 GB200 GPUs have been delivered. This means the project has not been delayed as rumored, but is rapidly ramping up.

• Revenue engine starting: UBS estimates that as the Abilene project reaches a scale of 350,000 GPUs in the first quarter of FY26 (August), the annualized revenue contribution will approach $8.3 billion. This is a key support for Oracle's cloud infrastructure (OCI) revenue growth accelerating to over 80%.

This is Oracle's strongest card. If this project can be delivered on time and OpenAI pays on time, the logic of the shorts will be broken.

Valuation logic: disaster expectations already priced in

Finally, let's see if this deal is worth it.

• Safety cushion under pessimistic assumptions: UBS conducted a stress test, assuming that OpenAI brings in zero revenue in FY30 (disaster scenario), Oracle's current stock price corresponds to a FY30 price-to-earnings ratio of only 12.4 times.

• Discount compared to Microsoft: In contrast, Microsoft, which also faces OpenAI risks, has a corresponding FY30 price-to-earnings ratio as high as 18 times Oracle's current stock price (around $195) has already factored in a lot of pessimistic expectations—including the collapse of OpenAI, financing difficulties, and declining profit margins. As long as any of the above risks are alleviated (for example, if OpenAI secures funding), even a slight positive development could trigger a sharp valuation correction. This is a typical high-risk, high-reward moment.