Oracle(US:ORCL) Youtube·2025-12-11 19:00Core Insights - Oracle reported a record-breaking Remaining Performance Obligation (RPO) of $523 billion, reflecting a significant increase of $68 billion from the last quarter and a 433% increase year-over-year [3][4] - Despite the impressive RPO figures, Oracle's stock has seen a decline of 13.5%, raising questions about the sustainability of its growth strategy [2] - A substantial portion, 43%, of the RPO is expected to be implemented in 2026, amounting to $225 billion, which may help offset the company's planned capital expenditures of around $50 billion [4][10] Financial Performance - Oracle's cloud business, particularly its Oracle Cloud Infrastructure (OCI), has shown strong growth, with a year-over-year increase of 66%, and GPU-related cloud revenue surged by 177% [12] - The company is financing its growth through debt, which raises concerns about the sustainability of its core business [8][9] Competitive Landscape - Oracle is entering a competitive market dominated by major players like AWS, Azure, and Google Cloud, which have established themselves as early movers in AI and cloud services [7][15] - There are concerns that Oracle may be overestimating its ability to compete with these hyperscalers, especially given its late entry into the AI space [16] Market Dynamics - The RPO surge may not translate into immediate cash flow, as over 75% of these obligations are set to start within 24 months, leading to skepticism about the actual realization of these contracts [9][18] - Analysts are urged to focus on the profitability and sustainability of the businesses behind the $523 billion RPO commitments, rather than solely on Oracle's core operations [17][19]