Analyzing ORCL's "Unheard" Guidance & Profitable A.I. Attainability

Core Viewpoint - Oracle's stock surged approximately 36% following its earnings report, driven by optimistic projections for AI infrastructure revenue, despite the actual earnings being disappointing [1][2][3]. Financial Performance - Oracle's infrastructure revenue increased from $10 billion last year to $18 billion this year, with projections suggesting it could reach $144 billion by 2030 [2]. - The company has $455 billion in remaining obligations from signed contracts, a figure described as unprecedented [3]. Customer Contracts - It is rumored that $300 billion of the $455 billion in obligations comes from a single customer, OpenAI, which has a revenue of only $10 billion [5]. - This raises concerns about the sustainability of such large contracts given OpenAI's current revenue capabilities [5]. Market Reactions - Despite the stock's rise, there was a significant amount of selling pressure, with negative money flows of $400 million observed on the day of the stock surge [6][7]. - The stock trading volume was high, indicating that many short positions were established prior to the earnings report, reflecting skepticism about Oracle's growth potential [8][9]. Valuation Insights - The valuation of Oracle was discussed, with a target range raised to between $37 and $318, indicating a long-term outlook rather than a one-year target [10][11]. - The potential market cap could reach approximately $1.5 trillion, with a target price exceeding $500 [12]. Risks and Concerns - Continued selling pressure could lead to a significant pullback in Oracle's stock price, potentially dropping by $30 to $60 if the overall market declines [13].