GregTheAnalyst
Independent Investor, Macro/Micro & Technical Analysis
Oracle is heading for a crash toward a $70 target as it rejects its monthly 50-period moving average from below. The biggest crashes come when a stock breaks its weekly 200-period and monthly 50-period averages, retests them from below and fails. Credit backs this up: Oracle leaned on cheap debt until its CDS hit levels unseen since 2009 and it was cut to one notch above junk, then announced about $20 billion of equity issuance anyway with shares 50% off their highs. x.com x.comÂ
Oracle looks exposed to a data-center glut, with far too many data centers being the key domino. Oracle sent a force majeure notice over its New Mexico data center, per a headline shared by @DeItaone, as the stock was retesting its monthly 50-period and weekly 200-period moving averages from below. x.com x.comÂ
Oracle's stock is ignoring nervous credit desks, which is not a good sign. Per @CheddarFlow, Oracle's credit risk has skyrocketed, yet the shares still trade as if it isn't happening. x.comÂ
Oracle's credit risk is hard to dismiss when its CDS prices a roughly one-in-four risk-neutral chance of default sometime in the next five years. x.comÂ
Oracle's debt risk is already largely priced in after the stock fell 43.64% over the past year and 56.1% from its all-time high, which is why its credit default swaps exploded. That makes now a questionable time for Michael Burry to go short. x.comÂ
Oracle's debt could implode, leaving shareholders exposed to severe losses. Its five-year CDS is at 261 basis points, above its 2008 highs; the perceived chance of its debt imploding has gone from zero to something higher. CDS alone is not a meaningful signal to increase or reduce exposure. x.com x.comÂ
Oracle looks set to burn many more billions in cash at least into the first half of fiscal 2028. That is the less reassuring implication of Reuters' headline that Oracle expects cash flow to turn positive in the second half of that fiscal year, even though the market liked the news. x.comÂ
Oracle's forecast of a FY29 capex step-down and a limit on additional capital raises supports a return to all-time highs soon. Oracle says it will limit those raises to $20 billion through FY30 and reaffirmed its FY27 outlook of over $90 billion in revenue and $8.10 non-GAAP EPS. The stock remains very overcrowded. 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's capex will not step down soon enough to avert bankruptcy. TradFi reports that Oracle expects capex to step down in FY29; Oracle will be bankrupt by then. x.comÂ
Oracle's AI buildout looks fundable as spending peaks and cash flow turns positive. Spending is forecast to peak in FY27-28, with free cash flow positive in 2H FY28 and above $30bn in FY29, a roughly $54bn swing. New capital raising is capped at $20bn through 2030, half equity and half debt. Revenue is projected to grow from $90bn next year to $225bn+ by FY30. Bullish Oracle. 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
