Cleo Capital Managing Director Sarah Kunst delivered a pointed warning on CNBC on Thursday, June 11, saying that with the mood around Oracle (NYSE:ORCL | ORCL Price Prediction), “I feel like it’s 1999 again. We’ve got the Knicks and the Spurs in the final. We have Oracle being sort of the name on the street. But it’s not going to end like last time, right?” Kunst was framing Oracle as an AI infrastructure trade that may be running out of steam.
Her comments landed as Oracle shares opened sharply lower the morning after fiscal Q4 results. The stock closed the day at $184.10, an 8.53% drop from the prior close of $201.26, capping a 12.62% weekly slide. Kunst noted the stock is down more than 47% from its 52-week high in September, when it peaked at over $340.
The OpenAI Overhang
Kunst zeroed in on Oracle’s deep entanglement with OpenAI as one of the biggest risk factors hanging over the stock today. “They went from being sort of the front runner into kind of the dark horse of this unholy trinity of IPOs. And so I think that the OpenAI weakness is going to continue to have a not-great effect on Oracle,” she said.
Oracle’s backlog is heavily levered to OpenAI exposure, and Remaining Performance Obligations (RPOs) swelled to $638 billion, up 363% YoY, with $75 billion tied to prepaid or customer-supplied GPU arrangements. Funding that buildout is expensive: free cash flow turned negative by $23.69 billion in FY2026 against CapEx of $55.66 billion, and management plans to raise roughly $40 billion in FY2027 through debt and a $20 billion at-the-market equity program. Total liabilities now sit at $218.7 billion versus shareholders’ equity of just $43.1 billion.
The SaaSpocalypse Thesis
Kunst’s second argument moves beyond Oracle’s balance sheet to the broader software cycle. “I think that people are looking at this terrible consumer sentiment, gas prices, and midterms coming up, and they are looking for places to cut costs. And so it’s a good time to go dig around your SaaS spend receipts and say, can we tighten our belts a little bit?”
The macro backdrop supports the call. University of Michigan Consumer Sentiment registered 49.8 in April 2026, below the recessionary threshold of 60, while WTI crude sits at $95.00 per barrel, in the 81st percentile of its 12-month range.
In Oracle’s report, Kunst noted that legacy software sales declined by about 2%, cloud software underperformed expectations, and combined software revenues grew by only about 2%. That tepid software growth, sitting alongside Cloud Infrastructure growth of 84% in Q3 and 93% in Q4, points to a business increasingly dependent on a small set of hyperscale AI contracts.
What to Watch with Oracle
Oracle still trades at a premium multiple for a company of its size, with a forward P/E of 27. The company’s Q4 results showed EPS of $2.11 on revenue of $19.18 billion, with management guiding for $90 billion in revenue for FY2027 and non-GAAP EPS of $8.05.
Wall Street remains broadly bullish, with 36 buy or strong buy ratings against just one sell and an average price target of $255.18. Kunst’s structural warning runs the other way. If OpenAI’s commercial trajectory wobbles or enterprise SaaS budgets contract, Oracle’s RPO conversion story becomes the variable that matters most. Investors should keep an eye on cloud bookings disclosure, the pace of the $40 billion financing plan, and any further softness in software license revenue as the FY2027 narrative gets tested.
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