Oracle (ORCL)

Stocks he doesn't own he doesn't know as well. Oracle is transforming itself into an AI powerhouse - $50 billion spent on Capex this year compared to less than $25 billion last year. It is changing its stripes completely so if this doesn't work, it will be in trouble.

Still fairly expensive. Made a massive bet on AI, started laying people off last week. Fraught with risk right now. If things pan out and we see AI-related cashflow, could go up. If not, probably lots more downside.

Main reason he got rid of it was because of the price action. Lots of debt. Decent runway. People are going to wait for current earnings season. There are alternatives out there. Wait for a couple of quarters.

He prefers NBIS.

Can't assess it, because we can't value it or won't know what its balance sheet will look like. Maybe they shouldn't have plunged into the data centre build.

They delivered a strong quarter yesterday. When Oracle issued debt to pay for its big data centre build-out, investors became concerned over its credit, starting last fall. However, their Q3 had many highlights: top and bottom line beat and every division except their smallest posted better than expected sales. Also, their operating margin rose over the last quarter. EPS also grew. Q4 guidance: 19-21% revenue growth, higher than expected. Meanwhile, OpenAI completed its fundraising so it can pay its bills for the short/medium term; Oracle doesn't have to worry about this in their partnership with OpenAI.

Shares soared on their openAI deal. But ORCL lacks the cash flow of peers like Meta, and it carries serious debt. Other stock are safer though today' results could be good.

It's the king of the data centre, but we need to hear there's tremendous demand for the centres and not only from the hyperscalers and that the new Nvidia chips will be fabulous.

They report next week. Earnings report haven't helped the software stocks. Big questions remain. He wants Oracle to state detailed plans about the data centre build out. He believes in the name, but unfortunately it will take months before the bottom is called.

He bought more today. You should invest in all the AI models, whether it's Gemini or this or that. It has slumped because the street feels that AI is in a bubble. If you believe in that bubble, then Oracle won't make their future numbers.

Is -26.7% this year. Doesn't like their debt.

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.