Oracle stock rally: Here's what adds up (and what doesn't)

Core Viewpoint - Oracle is experiencing significant market excitement due to its potential involvement with TikTok and its commitments to OpenAI, but there are concerns about the sustainability and reality of this growth [2][4][5]. Group 1: TikTok and Market Value - Oracle's acquisition of a stake in TikTok is seen as a substantial opportunity, potentially enhancing its business growth [2]. - The market value of Oracle has surged by $400 billion, driven by a $300 billion deal, but the projected profit from this deal is only $30 billion in the coming years, indicating a disproportionate valuation [4]. Group 2: Backlog and Financials - Oracle reported a backlog of $455 billion in remaining performance obligations, a significant increase from $80 billion a year ago, primarily attributed to OpenAI commitments [3]. - Most of the new obligations are scheduled for fulfillment between 2027 and 2030, raising questions about the immediate impact on Oracle's financials [3]. Group 3: Leadership and Execution - The transition of leadership with the appointment of two co-CEOs following Saffra Catz's vice chair role is noted, with emphasis on the need for effective execution to capitalize on the backlog [6][7]. - Saffra Catz is credited with revitalizing Oracle, transforming it into a competitive player in the cloud space, now recognized as the fourth largest hyperscaler [8].