J P M O R G A N North America Credit Research 15 December 2025 Oracle If You Build It, Will They Pay? See page 6 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Neutral | ORCL | | | | ...

Core Viewpoint - Oracle Corporation is recognized as a significant player in the AI stock market, with Evercore ISI maintaining an "Outperform" rating and a price target of $275, emphasizing the company's long-term growth potential in cloud services [1]. Group 1: Financial Projections - Evercore ISI estimates Oracle's cloud revenue potential to be around $76 billion, based on the assumption that each megawatt can generate $10 million in annual GPU cloud revenue [3]. - The annual cost for leases is projected to be approximately $14.5 billion, or $1.2 billion per month, spread over 15-19 years, assuming an average lease length of 17 years [2]. Group 2: Revenue and Cost Structure - Leases are expected to account for about 18% of the total costs associated with supporting cloud revenue, aligning with Oracle's previous comments during the analyst day [4]. - Oracle has already secured commitments that will support 65% of the projected revenue ramp through FY29, amounting to around $116 billion in total OCI [4]. Group 3: Operational Insights - Despite reports of delays at the Michigan site, Oracle's planning includes delivery buffers, and the most significant revenue ramp from the OpenAI deal is anticipated between FY27 and FY28 [4]. - A potential pushout to FY28 for delivery is not expected to significantly alter the OCI revenue ramp, although it may not be favorable in light of recent stock price movements [5].

Core Insights - Oracle shares experienced a significant decline of 13% in pre-market trading following the release of Q2 earnings, dropping from approximately $207 to about $194 per share during the earnings call [1][2] - The company reported a substantial increase in cloud RPO, reaching $455 billion, which represents a 359% year-over-year growth, indicating strong demand for its services [4] - Oracle's capital expenditure for 2026 is projected to be $15 billion higher than previously forecasted, which has contributed to the recent drop in share price [5] Financial Performance - Oracle added $4 billion to its revenue guidance for Fiscal 2027, reflecting positive growth expectations despite recent challenges [5] - The company faced revenue shortfalls last quarter, attributed to delays at its Stargate data center in Abilene [2] Market Position - Oracle is positioning itself as a key infrastructure provider for AI model builders, enhancing its role in the enterprise software market [4] - The company is seen as a challenger in the hyperscale cloud market, aiming to be the backbone for the emerging AI inferencing economy [4]

Live Update #0 Traders Are Placing 90% Odds on Oracle Beating Earnings Oracle (Nasdaq: ORCL) is set to report after the bell. We’ll be updating this live blog with news and analysis the moment their earnings go live. One note before the company reports, prediction market Polymarket is currently assigning a 90% probability that Oracle will ‘beat’ today’s earnings. As a reminder, Wall Street consensus for the current quarter stand at: EPS: $1.64 Revenue: $16.19B YoY Sales Growth: 15.17% Looking ahe ...

Core Insights - Oracle's stock experienced significant volatility in 2025, initially declining due to tariff-related issues before rising on cloud momentum and strong fiscal performance [1][2] - The company's Q1 FY26 earnings report revealed a dramatic increase in total remaining performance obligations (RPO) to $455 billion, a 359% increase, driven by cloud bookings and AI-related deals [3] - Despite a peak stock price of $345 in September, shares fell over 40% due to concerns over financing for a rumored $300 billion deal with OpenAI and broader market conditions [5][6][8] Financial Performance - Oracle's cloud revenue grew by 27% in the fiscal fourth quarter, contributing to a 30% year-to-date stock gain [2] - The Zacks Consensus EPS estimate for the upcoming fiscal second-quarter report is $1.63, reflecting an 11% year-over-year increase, with revenues projected at $16.15 billion, up 14.8% [10] Market Position and Strategy - Oracle is strategically positioned in the enterprise AI infrastructure space, with its OCI Gen2 cloud offering multicloud interoperability and sovereign cloud capabilities [11] - Partnerships with Nvidia, AMD, and Ampere, along with supercluster deployments, indicate strong demand translating into revenue [12] Valuation and Investment Outlook - The recent stock correction has lowered Oracle's forward P/E ratio to approximately 30 times, making it more attractive compared to the 40+ times seen at its September peak [12] - The current dip in stock price is viewed as a potential buying opportunity, with expectations for a rebound driven by cloud RPO growth and large AI contracts [9][13]

Summary of Oracle Corporation (ORCL.K) Financial Analyst Day Industry and Company Overview - **Company**: Oracle Corporation - **Industry**: Cloud Computing and AI Infrastructure Key Points and Arguments Financial Performance and Projections - Oracle's management announced strong new bookings and raised long-term revenue targets, indicating positive top-line revisions [1][2] - The company reported over 700 AI infrastructure customers, showcasing broad-based demand across segments [1] - Oracle's AI business is expected to achieve gross margins of 30-40%, exceeding previous expectations [1] - FY30 EPS guidance was raised to $21, surpassing both Citi's estimate of $19.39 and the street estimate of approximately $18.35 [1] - Total revenue target set at $225 billion by FY30, representing a CAGR of approximately 30%, more than double the FY29 target from the previous year [5] Cloud Infrastructure and AI Growth - Co-CEO Clay Magouyrk highlighted a significant uptick in demand for Oracle Cloud Infrastructure (OCI), with an impressive $65 billion in Remaining Performance Obligations (RPO) added since September 1, tracking to over $2 billion per day [2] - The AI database segment is projected to grow significantly to over $20 billion by FY30, driven by database migration trends [2] - The OCI trajectory was updated to a CAGR of approximately 75% by FY30, an increase of about 5 percentage points from the previous earnings call [3] Application Software and AI Integration - Co-CEO Mike Sicilia emphasized the expanding breadth of Oracle's application software portfolio, particularly in financial services and healthcare, aided by AI [2] - Usage statistics revealed that 2,400 customers are currently leveraging AI in industry applications, with 600 AI agents deployed [2] Market Position and Valuation - Oracle is viewed as a differentiated player in the software and AI infrastructure market, with one of the strongest projected revenue and EPS CAGRs (~30%) among large-cap software companies and the broader S&P 500 [1] - The 1-year target price for Oracle is set at $415, based on a ~37x PE multiple to FY28 Non-GAAP EPS of $11.51 [10] Risks and Considerations - Key downside risks include higher-than-expected capital expenditures, which could impact margins [11] - A potential weakening in AI infrastructure demand or increased competition from other cloud providers could adversely affect Oracle's revenue and earnings [12] Additional Insights - The presentation highlighted Oracle's strategic vision for AI across its entire product portfolio, indicating a strong commitment to integrating AI solutions [1] - Despite a pullback in shares after-hours, the overall sentiment remains bullish on Oracle's growth trajectory and market positioning [1]

Summary of Oracle Corp. (ORCL) Conference Call Company Overview - **Company**: Oracle Corp. (ORCL) - **Market Cap**: $910.5 billion - **Enterprise Value**: $1.0 trillion - **Current Price**: $313.00 - **12-Month Price Target**: $320.00 (Upside: 2.2%) [1][32] Key Industry Insights - **AI Infrastructure**: Significant advancements in Oracle Cloud Infrastructure (OCI) enhance Oracle's positioning for AI workloads, with a focus on price-performance and operational efficiency [2][16]. - **Contractual Growth**: Oracle signed $65 billion in Infrastructure as a Service (IaaS) Total Contract Value (TCV) in the last 30 days, indicating broadening demand beyond OpenAI [17][18]. Financial Outlook - **Revenue Guidance**: Oracle targets $225 billion in revenue by FY30, representing a 31% CAGR, with OCI revenue projected at $166 billion [1][18]. - **Earnings Per Share (EPS)**: Targeting $21 in EPS by FY30, reflecting a 28% CAGR [1][18]. - **Growth Segments**: - Enterprise: +33% YoY, Gross Margin (GM): 65-80% - Distributed Cloud: +77% YoY, GM: 40-60% - Cloud Natives: +49% YoY, GM: 40-60% - AI Infrastructure: +117% YoY, GM: 30-40% [16] Key Risks and Challenges - **Execution Risks**: Concerns about Oracle's ability to meet ambitious targets due to uncertainties in data center lead times, GPU cycles, energy costs, and capital expenditures [1][20]. - **Market Share Losses**: Ongoing losses in the database market could hinder overall growth [25][34]. - **CapEx Burden**: High capital expenditures may weigh on free cash flow generation and overall profitability [24][34]. Strategic Developments - **AI Adoption**: Over 600 AI agents deployed across Oracle's SaaS portfolio, with significant customer engagement and rapid implementation timelines [21]. - **Ecosystem Integration**: OCI's deep integration with Oracle's software stack facilitates seamless migration of workloads, enhancing customer value [16][21]. Valuation and Investment Thesis - **Valuation Metrics**: Price-to-Earnings (P/E) ratio projected at 26.0 for FY26, with a potential upside to $450+ per share under less aggressive scenarios [1][32]. - **Investment Rating**: Neutral rating maintained, with a cautious view on execution against FY30 targets due to operational uncertainties [1][32]. Conclusion Oracle's strategic advancements in AI infrastructure and robust financial outlook present a compelling investment case, albeit tempered by execution risks and market share challenges. The company's ability to navigate these dynamics will be critical in achieving its ambitious growth targets.

Summary of Oracle's 2025 Conference Call Company Overview - **Company**: Oracle Corporation (NYSE: ORCL) - **Event**: 2025 Conference held on October 15, 2025 Key Points Discussed Oracle Cloud Infrastructure (OCI) - OCI aims to be the highest performance, lowest cost, and most secure cloud infrastructure possible, focusing on absolute excellence rather than just outperforming competitors [5][6][25] - The design of OCI emphasizes bare metal servers for enhanced security and extensibility, allowing customers complete control over their machines [11][12][14] - OCI's architecture is built to be resilient and extensible, anticipating future improvements across hardware and software layers [9][10] Infrastructure and Performance - Oracle has made significant investments in network architecture, including dedicated network fabrics and disintermediation to reduce latency and improve performance [61][66] - The introduction of Acceleron, a project aimed at enhancing performance, efficiency, and security, was announced, which includes new capabilities for input/output acceleration [58][59][78] - OCI provides a simple pricing model with consistent costs across regions, eliminating complex pricing structures that confuse customers [18][19] Customer Partnerships - **TikTok**: - TikTok has over 1 billion users globally, with significant infrastructure demands translating to millions of servers and zettabyte-scale storage [32][33] - The partnership with Oracle has allowed TikTok to scale its infrastructure rapidly, achieving a 60% increase in monthly active users since 2021 [39][43] - TikTok's unique shopping experiences, such as live streams, have driven infrastructure needs, requiring smart load balancing and proactive capacity planning [44][46] - **OpenAI**: - OpenAI's infrastructure needs have grown significantly, with a focus on industrializing compute to maximize efficiency and capacity [80][85] - The collaboration with Oracle has enabled OpenAI to scale its operations rapidly, addressing compute constraints effectively [88][96] - OpenAI's growth has been supported by Oracle's ability to provide flexible and secure infrastructure solutions across various global markets [99][100] Future Directions - Oracle is committed to continuous improvement of OCI, focusing on enhancing user experience, stability, and operational efficiency [50][51][54] - The company is exploring new technologies and partnerships to further expand its capabilities in AI and cloud services, ensuring it remains competitive in the evolving market [92][98] Additional Insights - The emphasis on user experience metrics at TikTok highlights the importance of infrastructure stability and performance in maintaining user engagement [49][50] - Oracle's approach to security, including Zero Trust Packet Routing and multi-planar networks, reflects a commitment to safeguarding customer data while enhancing performance [71][75] This summary encapsulates the core discussions and strategic directions presented during Oracle's 2025 Conference, highlighting the company's focus on cloud infrastructure, customer partnerships, and future growth initiatives.

Core Viewpoint - Oracle's stock has experienced significant volatility but has shown resilience, driven by strong demand for AI-related services and a substantial backlog of contracted revenue, which has reached nearly $500 billion [2][6]. Group 1: Stock Performance - Oracle shares rebounded from an early-week decline, surpassing a trendline entry point and showing a nearly 80% increase year-to-date [1][12]. - The stock reached a high of 307 during trading but faced a pullback due to broader market influences, including geopolitical tensions [4][12]. - Analysts have noted a positive shift in Oracle's stock following favorable commentary, with a 3.1% gain on a recent trading day [3]. Group 2: Financial Outlook - Oracle is expected to provide updated financial targets at its upcoming AI World conference, with projections indicating potential revenue of $144 billion in cloud infrastructure sales by fiscal 2030 [5][7]. - Analysts anticipate Oracle could exceed its fiscal year 2030 revenue forecast of $200 billion, with an expected annualized EPS growth of approximately 20% from fiscal year 2025 to 2030 [9]. Group 3: Strategic Developments - The rebranding of Oracle's annual conference to AI World reflects the company's strategic focus on artificial intelligence as a key growth driver [1][10]. - Oracle's partnerships, particularly with OpenAI, are central to its revenue backlog, including a reported $300 billion cloud contract [6]. Group 4: Market Position and Competition - Oracle is positioning itself against major cloud competitors like Amazon, Microsoft, and Google, leveraging AI to enhance its market presence [10]. - Analysts have noted the competitive landscape is challenging, with concerns about high capital expenditures and negative free cash flow [8].

Levi Strauss - Levi Strauss reported better-than-expected earnings, with adjusted EPS of 34 cents per share and revenue exceeding $1.5 billion [2][3] - The company anticipates a 3% decline in fourth-quarter revenue compared to last year, citing concerns over tariffs impacting demand [2][4] - For the fiscal year, Levi Strauss expects a sales increase of 3%, up from a prior forecast of 1-2%, and adjusted EPS guidance has been raised to between $1.27 and $1.32 [4][5] Oracle - Oracle received positive adjustments from analysts, with Ever ISI raising its price target to $350 and Citigroup boosting it to $415, maintaining a buy rating [6][7] - Analysts view recent pullbacks in Oracle's stock as a buying opportunity, driven by growth in Oracle Cloud Infrastructure (OCI) and expected clarity on capital expenditures and profitability from AI projects [7][8] - An upcoming AI world event in Las Vegas is anticipated to serve as a catalyst for Oracle's stock [9] Applied Materials - Applied Materials saw a price target increase from B Riley to $265, up from $200, with a buy rating maintained [10] - The stock has risen over 30% year-to-date, driven by expectations of significant order growth in semiconductor capital equipment [11][12]