Oracle Corp (ORCL) is trying to pull off a tricky balancing act right now. On one hand, it's building a massive new headquarters in Nashville and promising thousands of jobs. On the other, Wall Street is increasingly skeptical about whether the company's enormous AI bets will actually translate into revenue.

Building a Southern Tech Hub From Scratch

Oracle is going all-in on Nashville as a future growth center, even though getting people to actually work there has proven challenging. The company currently has more open job listings in Nashville than in any other U.S. city, with most roles focused on cloud infrastructure that's central to its AI strategy, according to a Bloomberg report published Thursday.

Back in 2021, Chairman Larry Ellison committed to creating 8,500 jobs in the city by 2031 as part of a tax incentive agreement. The vision includes a sprawling campus along the Cumberland River featuring more than 2 million square feet of office space, a pedestrian bridge, and even a Nobu restaurant.

There's just one problem: Oracle currently employs only about 800 people in Nashville. That's a pretty significant gap between ambition and reality.

The AI Spending Question That Won't Go Away

While Oracle plans for the future in Tennessee, its stock has been getting hammered. Shares have dropped close to 40% over the past three months, putting Oracle on track for its worst quarterly performance since 2001.

Jefferies analyst Brent Thill pointed to a fundamental shift in how investors are thinking about AI investments. The selloff reflects growing worry that Oracle's near-term prospects are increasingly tied to OpenAI's financial strength. OpenAI happens to be Oracle's largest cloud customer and also its least transparent partner.

Thill told CNBC that markets have moved from the "AI hype" phase into an "AI show me" phase. Investors now want to see clear revenue visibility that justifies the massive capital expenditures these companies are making. He warned that Oracle's profit margins are under pressure at exactly the same time its capital spending continues climbing.

During the current quarter, Oracle shares fell more than 31% to around $198 by late December.

Despite the recent weakness, Jefferies maintains a positive long-term view. Thill expects the AI market will eventually consolidate around a handful of dominant players, including Alphabet Inc (GOOGL) Google, OpenAI, and Anthropic.

ORCL Price Action: Oracle shares were up 1.03% at $195.61 at the time of publication on Thursday, according to market data.