Core Insights - Oracle has undergone a significant transformation over the past 24 months, evolving from a legacy database company to a key player in the AI infrastructure market [1] - The narrative surrounding Oracle's growth is more important than traditional valuation metrics, highlighting a shift in market dynamics [2] Financial Performance - Following a strong earnings report in September 2025, Oracle's shares surged nearly 40% in a single day, reflecting high volatility typically seen in smaller companies [3] - Oracle's remaining performance obligations (RPO) increased to over $523 billion, driven by substantial AI contracts, which triggered significant ETF buying and algorithmic trading [4] Market Dynamics - The market's focus has shifted towards narrative-driven momentum rather than traditional financial metrics, leading to rapid price changes [4] - Despite the initial surge in stock price, much of the gain was lost by early 2026 as investors began to scrutinize the company's balance sheet [4] Financial Concerns - Oracle's debt has exceeded $100 billion, raising concerns about its financial stability [6] - The company is projected to spend around $50 billion in capital expenditures for fiscal 2026 to remain competitive in the AI sector [6] - In Q2 of fiscal 2026, Oracle reported negative free cash flow of approximately -$7.3 billion, indicating potential liquidity issues [6]