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Table of Contents
🔥 Here’s What’s Happening Now
In line CPI led to another big up day in the market, Traders are now pricing in 71bps and 6 cuts. Hard to see that thinking get more dovish from here, unless economic numbers fall off a cliff.
Also, hard to see forecasts of Capex get much rosier from here, which begs the question of what keeps this rally going? Given that the default direction of the market is up, I would expect us to continue to bleed higher unless there is a good reason not to.
Oh, and VIX is right around the low for the year, but remember it did get into single digits during Trump I….
Speaking of continued Capex expenditures, I do think this is important…..
OpenAI in the past nine months has committed to spend around $60 billion a year for computing from Oracle ORCL -6.23%decrease; red down pointing triangle, shell out $18 billion on a data-center venture, build a new mass-market AI-hardware device and purchase $10 billion of customized chips.
The biggest unknown for the world’s most valuable startup: how it will pay for such outsize ambitions.
Real interesting talk about markets and trading with Mayhem yesterday. Particularly interested in what he had to say about the tendency of prices to be pulled where the most options contracts reside and call and put walls. He also convinced me to short ORCL calls, which worked out real well…….
Not sure if it’s time to take profits, but so far so good on the $350 calls I sold
Meanwhile, a few ramifications from this…
First off, European defense stocks broke out….
Drone stocks also…
We’ve been talking about ONDS since it’s been in the ones. Expect a drone ETF from us at some point before the year is out.
For some reason KYIV broke out yesterday, keep an eye on this one as it’s the only real pure Ukraine play….
🧠 Oracle earnings: what mattered, what’s next, who wins from here
Speaking of ORCL, I am short calls but this could be a NVDA 2023 earnings moment for AI if all of this backlog comes to fruition.
I’m going to be on Schwab Network at 8:20AM EST to talk NVDA, but will be sure to talk ORCL earnings.
What just happened (hard facts)
RPO (backlog) exploded to $455B, up +359% y/y, off the back of four multi-billion AI cloud contracts — headlined by a reported $300B, ~5-year compute deal with OpenAI. Shares ripped to record highs, logging the biggest one-day move for a mega-cap in decades. Oracle Investor Relations+2Reuters+2
Cloud Infrastructure (OCI) revenue +55% y/y; total cloud (IaaS+SaaS) +28% y/y; total revenue $14.9B (+12% y/y). Oracle Investor Relations+1
Management now guides OCI to ~$18B in FY26 (+77% y/y) and to ~$144B by FY30, implying a steep multi-year ramp to meet AI demand (and heavy capex to match). Reuters+1
The stock is now trading ~33x fwd EPS, roughly in line with MSFT/AMZN on that metric post-spike — i.e., the market is already pricing real execution. Reuters
Translation: Investors didn’t reward a small beat; they re-rated Oracle as a top-tier AI compute utility with visibility stretching years.
What’s next for ORCL
Bull case (credible):
That $455B RPO converts to revenue as OCI stands up more gigawatt-scale GPU data centers and delivers AI training + inference at scale (multi-cloud adjacency with MSFT/AMZN/GOOGL helps). Free cash flow inflects after peak capex. Reuters+1
Key proof points to track (next 3–6 months):
RPO → billings → revenue cadence (watch quarterly step-ups, not just headlines). Oracle Investor Relations
Capacity adds (sites, racks, GPUs provisioned) vs. promised timelines; any chip supply constraints (NVIDIA delivery) or power limits. MLQ
Capex vs. margin: capex guided sharply higher; how fast does margin/FCF recover as cohorts mature? Barron's
Concentration risk: OpenAI is huge; watch for client diversification to de-risk. Reuters
Risk case:
Execution slip (build/power/chips), slower RPO conversion, or an AI-spend air pocket. At ~33x forward, misses will sting. Reuters
Positioning view: After the spike, pullbacks on execution headlines are buys if RPO conversion stays on track. The multi-year setup (OCI to $144B by FY30) gives you a clear scorecard. Reuters
The second-derivative trade: next-gen winners & losers
🏆 Winners (rated 1–10 for 12–24 mo)
NVIDIA (NVDA) — 9/10: Every one of those Oracle gigawatt data centers is a GPU farm. RPO → GPU shipments. MLQ
Broadcom (AVGO) — 8.5/10: High-speed networking (Tomahawk/Jericho), custom silicon, optics — the data plumbing for AI clusters Oracle is building.
Applied Materials / Lam Research / KLA (AMAT/LRCX/KLAC) — 8–8.5/10: WFE & metrology demand tied to AI capacity buildouts across cloud partners. Barron's
TSMC (TSM) — 8/10: Packaging + logic at the heart of AI accelerators; knock-on demand from Oracle’s capex wave. Reuters
Power & infra adjacencies (select) — 7.5–8/10: grid interconnect, transformers, liquid cooling vendors (the “behind-the-meter” enablers of gigawatt DCs).
⚠️ Losers / underweights
Legacy data-center REITs with low AI mix — 5.5–6.5/10: AI load is power-dense; winners skew to operators who can deliver high-MW, liquid-cooled capacity. Others may lag on yields and retrofit costs.
General-purpose clouds without cost/performance edge on training — 6–6.5/10: Oracle just proved price/perf + bespoke buildouts matter; anyone not competitive on $/FLOP risks losing AI tenants. Reuters
On-prem hardware sellers without AI attach — 5–6/10: share of compute keeps migrating to cloud AI plants; classical on-prem refreshes look stale.
How to trade the “Oracle moment”
Core: ORCL on dips if RPO conversion stays strong; NVDA/AVGO/TSM as the immediate second-order beneficiaries of Oracle’s capex; AMAT/LRCX/KLAC as durable picks & shovels. Oracle Investor Relations+1
Watch: power/cooling suppliers; multi-cloud interconnect partners; any AI-optimized colocation that can deliver high-density footprints.
Avoid/underweight: low-AI DC exposure; vendors with no AI cost/perf story.
Oracle just re-rated into an AI compute utility with a $455B backlog. If management turns that RPO into revenue on time, dips are buys. The knock-on winners are the GPU/networking and fab tool chains (NVDA, AVGO, AMAT/LRCX/KLAC, TSM). The laggards will be infrastructure that can’t deliver high-density, low-cost AI capacity.
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📈 Stock Corner
Today’s stock Galaxy Digital (GLXY), full disclosure we have a 2x on this (GLXU)…..
Wow! zoom in Looks like
@vladtenev
owns a bunch of blue chips and $GLXY— #TheUndefinedMystic (#@pennycheck)
9:56 PM • Sep 10, 2025
From Chat GPT…..
Expert Ranking & Would I Buy?
I’ll rate it and then give whether I’d buy and under what conditions.
Rating (12-24 months horizon): 6.5 / 10
Here’s why:
Strong growth potential via infrastructure + digital assets tailwinds (adds plus), but
Execution risk and volatile revenue base (minuses) drag it down from being a “must-own”.
The stock looks more like a high-beta “asymmetric opportunity” rather than a core pick.
Would I buy it? Yes — but with conditional exposure and size discipline.
📬 In Case You Missed It
We talk about crypto, tokenization, and some of our ETF filings…..
🤝 Before You Go Some Ways I Can Help
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Tuttle Wealth Management: Your Wealth Unshackled
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