Detailed view for this entity.
“starting in late 2023 early 2024 Oracle actually positioned OCI as a cost-effective alternative to AWS or Azure for training and running large AI models”
“now Oracle starts to become the de facto AI infrastructure play as well”
“the market essentially rerated Oracle from a slow growth enterprise software company to a high growth cloud/AI company”
“I think the Stargate project was announced and a venture involving OpenAI, SoftBank and Oracle”
“they initially pledged a more than hundred billion dollars to build AI data centers”
“Oracle was actually named the infrastructure partner building and operating data centers for OpenAI with a 4.5 gawatt infrastructure commitment.”
“huge players like your open AI, your Tik Tok, Meta companies like that they are the front runners and they need to see the demand and their revenue grow profits grow in order for them to spend as much money on the infrastructure.”
“there is also a competitive displacement with the three leading players and margin compression from capeex and their pricing pressure as they seek to kind of so-called steal or quote unquote get more business from the existing pie.”
“the question is even though that we know that the backlog is contractual, problem is actually the pricing reported by some of the analysts that have done their due diligence that actually I think Oracle has actually kind of undercharged or underpriced themselves.”
“As we know they're bleeding cash they're free cash flow negative.”
“investors need to believe them both equity investors and also debt investors.”
“their debt is currently already 108 billion against their 20 billion of equity”
“their current ratio is actually 1.25.”
“which is why they are relatively safe in terms of short-term liquidity needs and maybe in the next one to two years or so.”
“So again, I think the main consideration or what we can kind of agree here is that Oracle is going through this hyperinvestment cycle.”
“Oracle has the cash flow in their favor. Net debt to IBIDA.”
“Oracle is a highly debt driven company. So, high risk, high reward to say the least.”
“The biggest risk is from OpenAI which has committed to spending more than $30 billion on Oracle infrastructure services over the next 5 years.”
“So, it's hard for me to be extremely bearish on Oracle. I think the stock could play out. I don't think it's a bad buying opportunity, but I was just trying to highlight the risks.”
“if something goes wrong, uh Oracle is in a very vulnerable position and they will likely be in trouble.”
“Oracle reported quarterly financial results that disappointed stock market investors. As of this recording, the price is down over 12% on the day after the announcement.”
“I estimated Oracle's cost of debt after tax cost of debt at 6%.”
“if you compare that with the cost of equity, which is 13.16%, you can see how much lower the cost of debt is compared to the cost of equity.”
“But Sephur Catz is is the power at this company. She is the CEO of this company. Uh she took over um she was a she wasn't a co-CEO but she and Mark Herd were CEOs at the same time.”