Oracle (ORCL)

They're putting their eggs into one basket, OpenAI, to build its massive infrastructure. They carry a lot of debt and lack the cash flow of the hyperscalers who are building data centres. To raise funding, Oracle issued debt. Credit default swaps on this debt blew out. Also, the Google vs. OpenAI rivalry happened, with Google outperforming OpenAI. However, Oracle is hiring Microsoft engineers to build the data centres, so if they pull this off, there could be a lot of upside. Don't count them out, but it wouldn't hurt to de-risk and trim your position. 

By 2030, earnings should about double due to new Stargate venture with OpenAI. That will take a lot of debt. Training margins with its AI training model won't be the highest, though still quite good. After all that, can it regain market share? More likely yes than no, but understand what you're signing up for. 

Keep your position size modest, and make sure to diversify elsewhere.

They skyrocketed during the 2000 tech bubble and we may be seeing that again. The shares are expensive, caught up in the AI hype. Their franchise business is strong, but there are better software stocks.

It is a tech bellwether, tracking investor sentiment--but how long will this positive sentiment last? (Shares are up 7.5% today.) Wider market sentiment will continue to year-end, because people want to be a part of this rally.

They reported disappointing earnings on Wednesday, then got hit by a negative Bloomberg report last Friday about delayed data centre openings. Shares have been falling since September because they have a lot of business with openAI that Wall Street isn't sure about. Oracle has been spending a lot building data centres and the street doesn't know if this can continue. Peers have better balance sheets. Oracle holds a lot of debt and has negative cash flow.

The market feels Oracle can't access the money it needs to continue its incredible build-out. Today, Oracle denied that their data centre buildout will be delayed, but investors didn't listen.

The options market suggests a 9% move for Oracle, but 6% for Broadcom. Oracle has to address their capex---will they do a $35 billion private debt deal which will add to their existing debt? Can enter at $185. Broadcom has more opportunity, given more customers for their chips and their existing relationship with Alphabet. Their PE is a little high, but they will benefit from a pivot away from Nvidia to other chips. AVGO has a tremendous growth opportunity, currently at only 9% of market share vs. NVDA's dominance if there is a market pivot, which he feels is happening.

Pretty volatile chart over the last year. Definitely a buy here. Borrowed a lot for its AI investments, but it'll work through all that. People will look back and see it as a great buying opportunity. Whole suite (much like MSFT) that will just balloon next year.

It's giving him a ton of pause. It has a lot of doubt around it. He's looking for an opportunity to get back into it after selling 50% of his stake last October. But there's too much smoke here to add anything now.

It looks like a falling knife, but is rallying 4% today. So, now it's a low-risk trade; stop out at $185. A buying opportunity now.

Their debt is the concern. Now, is an interesting time to enter. Let's see if they hit their openAI commitments. Under their CEO, he thinks they can succeed.

They build data centres better than anyone. It doesn't live or die depending on AI, though it is taking on a lot of debt. ChapGPT is their biggest business partner. He wouldn't write off either company in the face of Google's (and Broadcom's) current success with Gemini 3, but any company depending on ChatGPT is suddenly more precarious.

He's long Oracle, but isn't pleased with that. Doesn't like Oracle's debt. Many were long Oracle because of momentum.

If it doesn't show positive cash flow in a few years and will return to the net marks (again) in 2029-30... He likes it, but don't put all your eggs in one basket. Tech stocks like Oracle more speculative than, say, Google.