Stephane Rochon Oracle ORCL-N BUY Oct 27, 2003

People think of it as legacy databases and old technology. Slowly emerging as alternative player in the cloud. Joint Stargate project is exciting, includes $500B infrastructure push. Low base rate, so this pivot provides a revenue acceleration opportunity in cloud.

Rolled all his option from the 8/22 expiration to the 8/29 expiry. Net credit of $16 at the same $237.50 strike.

Has tripled for him over 2.5 years, though has trimmed a little a few weeks ago only to manage risk. Is up 42% this year. Is key in the AI build-out long-term.

They could no right until the current CEO reinvented the company as a data centre kingpin. Shares jumped today on news of expansion in their data centre strategy. They report Tuesday. Good numbers could spur profit-taking.

Went into yesterday with a 6% position in his fund, now just above 8%. Probably won't trim until it gets between 9-10%. Backlog was 360% more than what was expected. 

Views it same way as IBM. Both are legacy technology stocks. But then the light went on and they got into the cloud and data centres. 

Soared 36% today on their forecast on gigantic data centre growth.

Ironic that recent revenue and earnings missed, but it sees cloud infrastructure segment swelling from $10.3B in 2025 to $144B by 2030. Big winner of AI boom. Could be involved in TikTok ownership. Despite all the talk of capex, looks rather asset-light to him.

Huge run, but he's still modelling 28% EPS growth from 2026-2029. Trades at 38x for 2027 and 27x for 2028, kind of an expensive PEG, but not bad. Don't buy at the top, accumulate on pullbacks.

Their massive data centre build has an element of the 2000 dotcom building that he wishes wasn't there. If OpenAI were to go public and raise billions and has a clean balance sheet, maybe he wouldn't be concerned. But he is.

Debt to equity is roughly 3.9X and interest coverage is 5X. The company has carried higher debt loads in the pat and we would not be too concerned about the debt here. Gross margins at the business are in the 65% range and net margins are in the 15% to 20% range, so we don't think margins are overly concerning either and there is some 'wiggle room' to take on higher growth, lower margin businesses as well, while still having a healthy margin profile. 
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