• Recent reports revealed that Oracle’s fast-growing AI cloud server business is generating lower profit margins than anticipated, with internal documents showing margins averaging around 16% and instances of losses from renting out Nvidia chips.

• This disclosure has prompted investors to reassess the company’s earnings potential from AI services, bringing profitability concerns to the forefront despite otherwise robust momentum in Oracle’s cloud expansion and artificial intelligence partnerships.

• We’ll explore how concerns about AI cloud profitability have become a central consideration in Oracle’s current investment narrative.

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To be confident as a CPI FIM shareholder, you need to believe in the company’s ability to sustain its momentum after returning to profitability and growing both sales and net income in 2025. Investors have so far focused on solid earnings growth and a valuation below industry and peer averages, which supported the stock’s strong multi-year return. The most important short-term catalyst has been the prospect of further earnings improvement, with new leadership changes adding some fresh perspective. However, the recent news of Oracle’s thinner profit margins in a high-growth cloud segment could draw attention to profitability and margins across similar business lines, including at CPI FIM. While the direct impact appears limited for now given stable recent returns and a lack of immediate exposure, it does push margin risks, and investor sensitivity to them, to the foreground. If market sentiment shifts more broadly due to margin anxieties, the stock’s volatility could increase and risk appetite could change quickly in response. On the other hand, margin pressures could surprise those relying on past earnings momentum.

Despite retreating, CPI FIM’s shares might still be trading above their fair value and there could be some more downside. Discover how much.

Two fair value estimates from the Simply Wall St Community span a wide range, from EUR 0.37 up to EUR 2.84, highlighting how much opinions can differ. With margin risk now in focus after the recent news, it’s a reminder that performance outlooks are heavily debated, even among active retail investors.

Explore 2 other fair value estimates on CPI FIM – why the stock might be worth over 2x more than the current price!