Options selling with Christian
Growth Investor, Options Selling, Creator of Stock Catalysts
Oracle's reliance on OpenAI makes its backlog vulnerable. About $250B of backlog comes from OpenAI, which is not making money; that risk is no longer in Oracle's hands, and the stock is very likely to fall further. x.com x.comÂ
Heavy AI-related borrowing with little to show for it is pressuring Oracle, IREN and Nebius shares. These stocks are beginning to trend lower. x.comÂ
Oracle looks buyable for now because the large financing and equity raises feared for next year no longer look imminent. New Mexico commissioners say there were no talks to alter Project Jupiter's power agreement and doubt a majority will approve a change; Stargate may be over a year behind. PIMCO has left AI data-center bonds, which still threatens funding. This is probably a bottom until the AI bubble pops; wait until $200 to short. x.com x.com x.com x.com x.com x.com x.com x.comÂ
Oracle's big rally on its RPO jump was fake, and the only data since show OpenAI writing checks its business can't cash. The pop came on an earnings miss and took 57 days to undo; the stock then fell another 46% and has dropped after every report since. Within two weeks, a force majeure dismissed as a nothing burger gave way to word that its cash-incinerating key customer has $20B less revenue than due diligence assumed. Shorting in size is still hard. x.com x.com x.comÂ
The debt behind Oracle's capex is drawing credit-market concern. Its five-year credit-default swap spread has risen past 300 basis points. x.comÂ
Oracle looks mispriced because $11 of current consolidated earnings power puts it at 11x earnings without a breakup. It trades below its software business's value despite the highest gross retention in software; separating pre-AI OCI, AI operations and AI development makes it an obvious long. Future funding will cost more, but current leverage is no issue and all contracts are well below spot, leaving nowhere near neocloud risk. Fundamentals may not matter during panics. x.com x.com x.comÂ
OpenAI's funding strain makes Oracle's AI revenue less dependable because OpenAI pays its bills with money it must keep raising. Investors resisted Morgan Stanley's $1.4 trillion valuation pitch, forcing a cut to $1.25 trillion, and the next raise could come in below $30 billion; contracts funded by fundraising are worth less than contracts funded by cash flow. x.comÂ
Oracle's year-long evaluation of Cerebras' costs, performance, customer uses and equipment life strengthens the case for its inference technology. Oracle chose to bring the equipment into its data centers; that real-world buyer decision conflicts with the short seller report's criticism. x.comÂ
Oracle will likely either tank or skyrocket with OpenAI's IPO, and skyrocketing looks more likely. Oracle should be one of the most important companies for enterprise AI adoption, which is OpenAI's real focus rather than $20-a-month subscriptions. It also offers compute exposure. x.comÂ
Oracle's balance sheet and customer risks outweigh its slide to near a 52-week low. Heavy debt, more dilution, round-tripping, data-center delays and heavy OpenAI concentration all weigh on the stock. x.comÂ