Past performance does not predict future results. Informational only, not investment advice.
Oracle's forward owner earnings yield is 4.8% base case but negative −9.9% under strict capex treatment, falling well short of the author's >10% valuation threshold for sound value investments.
Oracle trades at low valuations with strong backlog and sustained AI infrastructure demand. Despite high debt and recent force majeure, the stock could appreciate 20-30% in the next 1-3 years before any potential crash.
Oracle is in a bear trend following the exit from an 18B data center project. Combined with geopolitical uncertainty (Iran sanctions rejection), the author expects downside and is positioning with put options.
Oracle is mispriced at 13.8x forward earnings given its $638B in contracted revenue and 97.5% GPU utilization. The company is efficiently financing data-center buildout through landlord capital, customer prepayments, and mixed capex, positioning it to capture growing global compute consumption as demand grows faster than AI infrastructure costs decline.
Oracle faces massive losses from unprofitable AI/LLM investments and will be forced to offload positions. The author expects Oracle stock to decline as private equity and tech giants unwind their AI spending without achieving profitability.
Oracle has been oversold on debt concerns following earnings, but the company's strong leadership and strategic partnerships position it for recovery. The post-earnings dip and cloud fears are temporary headwinds that present a buying opportunity.
Author is betting on Oracle stock tanking after earnings on Wednesday after market close, believing the broader market is in decline.
Oracle's $300 billion OpenAI deal is deeply problematic: the company must spend $80 billion annually on AI infrastructure while carrying $104 billion in existing debt, yet OpenAI can only pay $60 billion per year despite making just $13 billion in total revenue. If OpenAI loses funding or AI hype deflates, Oracle faces hundreds of billions in unpayable infrastructure costs, with credit default swaps at 2008 financial crisis levels signaling significant bankruptcy risk.
End of results.