Oracle Secures Pivotal Role in Finalized TikTok Restructuring

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The long-awaited restructuring of TikTok's U.S. operations is now complete, providing clarity for software giant Oracle. The company has secured a central position in the new arrangement, though the operational launch of the joint venture was marked by a series of initial setbacks.

Despite some early turbulence, optimism dominates the sentiment on Wall Street. Analysts at Guggenheim recently reaffirmed their "Buy" rating on Oracle shares, setting an ambitious price target of $400—more than double the current trading level. They view the company's cloud infrastructure as a critical growth engine for the next decade. The broader market consensus, with an average price target of $288, also sits significantly above the present share price.

Investor attention is now shifting to March 9th. The upcoming quarterly results will need to demonstrate how quickly the new revenue streams from the TikTok partnership and substantial AI infrastructure investments will translate into tangible financial performance.

Strategic Cloud and Data Mandate

Oracle's strategic win extends beyond a simple equity stake. While the corporation holds approximately a 15% share in the newly formed "TikTok USDS," its operational mandate is far more significant. Oracle has been entrusted with hosting the sensitive U.S. user data and the platform's algorithm within its own cloud infrastructure.

This guarantees long-term utilization of server capacity in a fiercely competitive market. Other investors in the venture include Silver Lake and MGX, while Chinese parent company ByteDance retains a minority stake of 19.9%. The market rewarded this development, with Oracle's stock climbing nearly 3% to $182.44.

Operational Hiccups and Legal Challenges

The venture's launch, however, has not been seamless. Shortly after the deal was finalized, users reported significant disruptions to content uploads and displays on January 26th. The cause was identified as a cascading system failure, triggered by power issues at a U.S. data center operating under challenging weather conditions. Investors largely looked past these technical teething problems, focusing instead on the long-term revenue potential.

A separate dampener comes from the legal arena. The law firm Rosen filed a class-action lawsuit on January 25th. The allegation centers on misleading statements in prior corporate documents concerning Oracle's debt situation and the capital required for expanding its AI infrastructure.

@ boerse-global.de | US68389X1054 ORACLE