MY 3 THOUGHTS ON ORCL EARNINGS
MY 3 THOUGHTS ON $Oracle(ORCL)$ EARNINGS
1. Revenue missed at the worst possible moment
Oracle is trying to convince the market it is becoming a top-tier AI infra supplier but another revenue miss in an environment where AI spend is exploding tells investors the monetization curve still isn’t matching the bookings narrative.
2. Margins compressed right as the company needs to fund multi-gigawatt buildouts
Capex pushed past $20B in six months, FCF swung from +$11B to –$13B, cloud expenses jumped 45%, and Oracle is carrying $120B+ of debt with $25B due in three years. This is real financial strain.
3. Oracle as a high-beta, high-capex AI buildout story
RPO hitting $523B is incredible but the equity is now a bet that Oracle can
• build capacity faster than $Amazon.com(AMZN)$ & $Microsoft(MSFT)$
• finance expansion w/o stressing the balance sheet
• convert backlog at margins that don’t fall further
I still lean toward the view that Oracle is making the right long-term investments because AI infrastructure is the critical path for the next decade but the stock won’t rerate until OCI proves it can turn this backlog into revenue without destroying margins.
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