'Fast Money' traders discuss Oracle sinking and its impact on the broader market

Core Viewpoint - Oracle's cloud margins are expected to be lower than Wall Street predictions due to high costs associated with Nvidia chips and the capital-intensive nature of building data centers, raising concerns about long-term profitability [1][2][3] Group 1: Financial Performance - Oracle's recent report indicated a significant backlog of cloud contracts, up 529%, which previously boosted the stock by as much as 40% [2] - The report highlighted a gross margin of approximately 14% on $900 million in sales, contrasting sharply with the historically high margins of 60-70% from Oracle's software business [10][9] - Analysts have expressed concerns about the visibility of Oracle's return on investment and long-term profitability, particularly in the next 6 to 12 months [3][7] Group 2: Market Reactions - Following the report, Oracle's stock experienced a decline of 7%, although this was not seen as catastrophic given the stock's previous performance [11][12] - The market is increasingly questioning the sustainability of Oracle's growth and the realization of its large backlog, with skepticism about whether these deals will materialize as expected [13][14] Group 3: Upcoming Events - Oracle World is set to take place in Las Vegas, where key executives will discuss the company's data center buildout and growth opportunities, which may address current profitability concerns [4][5] - The upcoming analyst day is anticipated to focus on financial questions regarding profitability and the duration of Oracle's partnership with OpenAI, which could significantly impact market perceptions [4]