A trade that wins if this tech stock's big AI spending fails to pay off

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A trade that wins if this tech stock's big AI spending fails to pay off
MarketsPersonal FinanceOracle Corp
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Tony Zhang gives a way to profit from a pullback in Oracle.

Oracle has invested heavily in infrastructure and strategic partnerships to bolster its position in the AI arms race. However, the stock's valuation appears rich given the competitive landscape. Investors are becoming more sensitive to the risks of these AI investments, including the uncertainty on revenue generation, integration challenges, and strong competition from rivals with more advanced AI capabilities.

to the S & P 500 suggests that it is more likely to bounce lower than breakout above this key resistance level. And momentum has turned negative, suggesting further downside is likely. And if we dive into the business, expected EPS growth rate of 14% is modest, especially when contrasted with competitors like META and AMZN . Furthermore, Oracle's recent cancellation of a significant cloud computing deal with Elon Musk's xAI raises concerns about its ability to secure and maintain high-profile contracts. Options on

is below $120 at expiration, with a maximum risk of $268 per contract if

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