To The Moon

$Oracle(ORCL)$’s stock just surged over 8% in after-hours trading! 📈 Driven by the AI data center boom, the company crushed Wall Street estimates and delivered its strongest earnings report in 15 years. 🚀 However, this historic win can't hide its massive financial pressures. $Oracle(ORCL)$ currently faces liabilities exceeding $100 billion,⚠️coupled with rumors of 30,000 layoffs for an AI-driven restructuring. So, is the market being overly optimistic, or is $Oracle(ORCL)$ truly the next AI powerhouse? 🤔 Let’s break down the core financials, the underlying risks, and the valuation outlook. 👇 1. 💵Did AI Just Supercharge Oracle’s Balance Sheet? Historic Highs : Total revenue hit $17.2 billion (up 22% YoY). For the first time in a decade, both organic revenue and non-GAAP EPS grew over 20%, with EPS reaching $1.79. Record-Breaking Backlog : Driven by AI contracts, Remaining Performance Obligations (RPO) surged an astonishing 325% to a record $553 billion. Cloud & Infrastructure Boom ☁️: Fueled by immense demand for computing power, overall cloud revenue jumped 44%, while core cloud infrastructure (IaaS) skyrocketed by 84%. 2. 🏗️Can a $553 Billion Backlog Outweigh Expansion Costs? $Oracle(ORCL)$ is rapidly transforming into an AI infrastructure powerhouse. It even raised its 2027 revenue guidance to $90 billion, signaling a massive 34% annual growth rate. 🌟 However, this aggressive expansion comes with significant financial risks: Massive CapEx & Cash Flow Squeeze : Nine-month capital expenditure hit $39.17 billion (up 3.2x YoY) and is projected to stay at a staggering $50 billion for FY26, which will inevitably pressure short-term free cash flow. Heavy Debt & Dilution : Facing a net debt of $104 billion and with share buybacks dropping to essentially zero, shareholders face potential dilution risks as shares outstanding grow 1-2% annually. Summary: Yet, these fears might be overblown. Many large AI contracts are backed by customer prepayments and customer-funded GPUs. With customers footing the upfront bill, financing risks drop significantly, and Oracle expects no need to issue extra debt in 2026. 🛡️ 3. 📊Are We Underpricing Oracle’s High-Margin AI Future? Despite risks, $Oracle(ORCL)$ ’s fundamental profitability remains intact. Looking ahead, its valuation actually looks highly attractive: Reasonable EV/EBITDA : Trading at a multiple of 30, it is slightly expensive but well-justified by its massive $553 billion backlog. Unwarranted P/E Compression : The current P/E of 27 is expected to drop rapidly to 14 by FY2028. This steep decline seems too pessimistic for a fast-growing AI leader. Strong Pricing Power : Analysts falsely assume future margin contraction. In reality, with AI demand heavily exceeding supply, Oracle commands strong pricing power. Even simple Nvidia chip rentals yield 30% to 40% margins. 🗣️ Questions for You Does a $553 billion backlog completely justify Oracle's heavy debt load and massive CapEx in your eyes? Do you think Wall Street is underestimating Oracle’s pricing power and future margins? Given these growth metrics, what is your target price for Oracle? Leave your comments and win Tiger Coins👇 For SG users only, welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs. 🎉Cash Boost Account Now Supports 35,000+ Stocks & ETFs – Greater Flexibility Now Find out more here. Complete your first Cash Boost Account trade with a trade amount of ≥ SGD1000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP. Click to access the activity other helpful links: 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉 How to open a CBA. How to link your CDP account. Other FAQs on CBA. Cash Boost Account Website.