Oracle(US:ORCL) Sou Hu Cai Jing·2025-09-11 05:06Core Viewpoint - Oracle's stock price surged over 40% following the announcement of its Q1 earnings, briefly elevating co-founder Larry Ellison to the title of the world's richest person, surpassing Elon Musk, although he ultimately reclaimed the title by the end of the trading day [2][3] Financial Performance - Oracle reported Q1 revenue of $14.93 billion, a 12% year-over-year increase, but below market expectations of $15.03 billion [2] - Cloud revenue grew by 28% to $7.186 billion, accounting for 48% of total revenue, while software revenue declined by 1% to $5.721 billion, making up 38% of total revenue [2] - Hardware revenue increased by 2% to $670 million, and service revenue rose by 7% to $1.349 billion [2] Key Metrics - The standout figure from Oracle's earnings report was the RPO (Remaining Performance Obligations), which reached $455 billion by the end of August, representing a threefold increase compared to the same period last year [3][5] - This significant growth in RPO was attributed to large cloud contracts with AI companies, particularly OpenAI [5] Market Reactions - The dramatic increase in Oracle's stock price, which saw a 35.95% rise, marked the largest single-day gain since 1992 [3] - The surge in stock price was driven by investor excitement over the potential future revenue from cloud contracts, despite concerns about the sustainability of such growth [4][9] Concerns and Challenges - There are doubts regarding the viability of the $300 billion cloud contract with OpenAI, given that OpenAI is currently operating at a loss and is not expected to break even until 2028 [6][8] - The ambitious projections for Oracle's cloud revenue are based on the assumption of continued explosive growth in AI applications, which may not materialize due to competition and market dynamics [8] - The infrastructure required to support the projected growth in cloud services, including significant power supply needs, raises additional concerns about feasibility [9]