V i e w p o i n t | 09 Oct 2025 07:40:50 ET │ 15 pages Oracle Corporation (ORCL.K) Expecting Positive Customer References + Profitability At AI World CITI'S TAKE After a historic Q1, ORCL shares have traded off 10%+ from recent highs on concerns around quality of backlog, profitability concerns following a slew of press reports and broader AI bubble/circularity concerns. We view the pullback as a buying opportunity as we see a broadening set of customers powering OCI growth, and we expect management to prov ...

Core Insights - The order book for the company stands at approximately $450 billion, which is expected to translate into revenue over the next several years as data centers become operational [1] - The company is positioned in the AI cloud space by renting out GPUs for model training and inference workloads, similar to other hyperscalers [2][6] - The company has a high-margin software and applications business that supports its expansion in cloud infrastructure, unlike competitors who may need to borrow at higher costs [3] - By the end of the decade, the company anticipates a potential upside of $60 billion compared to consensus estimates [4] - The company has recently upgraded its infrastructure and is sourcing chips from Nvidia to enhance its offerings [5] - There is a significant shortage of computing capacity in the market, leading to increased demand for the company's services [6][7] - The company's cloud infrastructure revenue was around $10 billion last year, significantly lower than competitors like Amazon and Azure, which reported $125 billion and $75 billion respectively [8] - The company has been undergoing a transformation since 2017, shifting focus towards providing computing capacity and services [9]

Group 1 - The database-software company achieved billion-dollar contract wins in its latest quarter, leading to a significant increase in share price by over 37% [1]