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RT @onechancefreedm: Oracle’s Future Is Big But The Bill Is Bigger
Cloud revenue is growing fast, up to about $8B this quarter from $6B a year ago, while traditional software is flat to down. Oracle is no longer just selling licenses; it’s increasingly running workloads.
The backlog is the headline number for a reason. RPO jumped to $523B, up from under $100B a year ago, driven by a handful of very large cloud contracts. These are signed commitments. The catch is timing, only about 10% converts to revenue in the next 12 months. Most of it lives years out.
Operating profitability is still solid. Core margins aren’t distressed, and the business is not falling apart operationally.
What looks strong but is partly cosmetic
Net income almost doubled, but that’s not because the business suddenly became far more profitable. A large portion came from non operating investment gains, not customers or pricing power.
The tax rate also flatters the quarter. Oracle explicitly tells you that once you strip out one offs, the real tax rate is closer to 21%. In other words…don’t extrapolate this quarter’s GAAP earnings too far.
Cash on hand went up, but mostly because Oracle issued debt and sold an investment, not because free cash flow suddenly surged. This wasn’t a cash harvesting quarter, it was a funding quarter.
Where the pressure is building
The strain isn’t on the revenue line. It’s on the cost of becoming a cloud infrastructure company at speed.
Cloud costs are rising fast. Data center capacity is expensive, and Oracle says directly that these costs will continue climbing as it expands footprint and geography. Segment margins are compressing, and restructuring charges are showing up as the company tries to keep that compression contained.
This is the classic transition risk where revenue can look fine for a while even as cash economics worsen, because spending happens up front and revenue arrives later.
Balance sheet and cash flow reality
Oracle is clearly in build mode.
Property, plant, and equipment jumped sharply in just 6 months. Total assets ballooned. Debt is higher, and recent issuance locked in long dated fixed coupons in the mid 4% to low 6% range, which tells you financing is no longer cheap.
The most important disclosure is off the balance sheet where Oracle has $248B in uncommitted future data center lease obligations, starting in FY26–FY28, with 15–19 year terms. These don’t fully show up yet, but they are real future costs.
Operating cash flow is positive, but free cash flow is deeply negative because capex is running far ahead of cash generation. Some of that spend hasn’t even hit cash yet and is sitting in unpaid capex.
Liquidity looks better, but it’s been engineered to support the buildout, not because the business is throwing off excess cash.
Why the stock is acting this way
The market isn’t confused about growth. It’s uneasy about timing and execution.
Oracle is being repriced like an infrastructure builder, not a pure software name. When long term rates are high and credit is less forgiving, investors get less patient with “we’ll earn it later” stories especially when the company has already committed to massive fixed costs.
That’s why even rumors about delays matter. It’s not about whether Oracle is lying. It’s about the fact that small timing slips matter a lot when spending is front loaded and margins are under pressure.
My Read
Oracle today is a company with real cloud demand and a massive long term opportunity, but also very real near term financial strain from building that future all at once.
Earnings optics look good, but cash flow tells a harder story. The balance sheet can handle it for now but the margin for execution error is thinner than the stock price was implying.
The market isn’t rejecting the growth story. It’s deciding how much it trusts Oracle to deliver it on time, at scale, and without letting cash flow and leverage become the story instead.
[...]
RT @onechancefreedm: Oracle’s Future Is Big But The Bill Is Bigger
Cloud revenue is growing fast, up to about $8B this quarter from $6B a year ago, while traditional software is flat to down. Oracle is no longer just selling licenses; it’s increasingly running workloads.
The backlog is the headline number for a reason. RPO jumped to $523B, up from under $100B a year ago, driven by a handful of very large cloud contracts. These are signed commitments. The catch is timing, only about 10% converts to revenue in the next 12 months. Most of it lives years out.
Operating profitability is still solid. Core margins aren’t distressed, and the business is not falling apart operationally.
What looks strong but is partly cosmetic
Net income almost doubled, but that’s not because the business suddenly became far more profitable. A large portion came from non operating investment gains, not customers or pricing power.
The tax rate also flatters the quarter. Oracle explicitly tells you that once you strip out one offs, the real tax rate is closer to 21%. In other words…don’t extrapolate this quarter’s GAAP earnings too far.
Cash on hand went up, but mostly because Oracle issued debt and sold an investment, not because free cash flow suddenly surged. This wasn’t a cash harvesting quarter, it was a funding quarter.
Where the pressure is building
The strain isn’t on the revenue line. It’s on the cost of becoming a cloud infrastructure company at speed.
Cloud costs are rising fast. Data center capacity is expensive, and Oracle says directly that these costs will continue climbing as it expands footprint and geography. Segment margins are compressing, and restructuring charges are showing up as the company tries to keep that compression contained.
This is the classic transition risk where revenue can look fine for a while even as cash economics worsen, because spending happens up front and revenue arrives later.
Balance sheet and cash flow reality
Oracle is clearly in build mode.
Property, plant, and equipment jumped sharply in just 6 months. Total assets ballooned. Debt is higher, and recent issuance locked in long dated fixed coupons in the mid 4% to low 6% range, which tells you financing is no longer cheap.
The most important disclosure is off the balance sheet where Oracle has $248B in uncommitted future data center lease obligations, starting in FY26–FY28, with 15–19 year terms. These don’t fully show up yet, but they are real future costs.
Operating cash flow is positive, but free cash flow is deeply negative because capex is running far ahead of cash generation. Some of that spend hasn’t even hit cash yet and is sitting in unpaid capex.
Liquidity looks better, but it’s been engineered to support the buildout, not because the business is throwing off excess cash.
Why the stock is acting this way
The market isn’t confused about growth. It’s uneasy about timing and execution.
Oracle is being repriced like an infrastructure builder, not a pure software name. When long term rates are high and credit is less forgiving, investors get less patient with “we’ll earn it later” stories especially when the company has already committed to massive fixed costs.
That’s why even rumors about delays matter. It’s not about whether Oracle is lying. It’s about the fact that small timing slips matter a lot when spending is front loaded and margins are under pressure.
My Read
Oracle today is a company with real cloud demand and a massive long term opportunity, but also very real near term financial strain from building that future all at once.
Earnings optics look good, but cash flow tells a harder story. The balance sheet can handle it for now but the margin for execution error is thinner than the stock price was implying.
The market isn’t rejecting the growth story. It’s deciding how much it trusts Oracle to deliver it on time, at scale, and without letting cash flow and leverage become the story instead.
[...]
Offshore
EndGame Macro RT @onechancefreedm: Oracle’s Future Is Big But The Bill Is Bigger Cloud revenue is growing fast, up to about $8B this quarter from $6B a year ago, while traditional software is flat to down. Oracle is no longer just selling licenses; it’s increasingly…
Oracle Shares Rebound After Denying 'Delays' https://t.co/V9H3ghr5CB - zerohedge tweet
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The Signal Burry Pointed To in Household Wealth
This isn’t saying people have ditched housing for stocks. It’s showing that, at the system level, equity gains have grown so large that stocks now make up a bigger share of household net worth than real estate. That only tends to happen when markets have run well ahead of the rest of the economy. It’s less a snapshot of confidence and more a measure of imbalance.
You don’t see this setup often. When it shows up, it’s usually late in the cycle, after years of strong returns have pulled future gains forward.
Why the risk matters
Stocks move fast. Housing doesn’t. When most of the wealth effect is coming from something that can reprice in weeks instead of years, the economy becomes more sensitive to drawdowns. A selloff doesn’t just hit portfolios…it hits spending, hiring, and sentiment all at once.
The modern wrinkle is concentration. A big share of household equity exposure now sits inside index funds, and those indexes are increasingly driven by a handful of names. That means the system doesn’t need a broad collapse to feel pain. Stress in a few leaders can ripple outward quickly.
The historical warning
The last time this balance tipped was in the late 60s and late 90s and the adjustment didn’t come through housing strength. It came through equity underperformance over time. Not always dramatic, but persistent. Years where markets went sideways, valuations slowly came down, and investors learned that paper wealth can fade without a single obvious catalyst.
That’s the real risk here. Not an imminent crash, but a setup where the upside requires everything to keep going right while the downside only needs something small to go wrong.
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The Signal Burry Pointed To in Household Wealth
This isn’t saying people have ditched housing for stocks. It’s showing that, at the system level, equity gains have grown so large that stocks now make up a bigger share of household net worth than real estate. That only tends to happen when markets have run well ahead of the rest of the economy. It’s less a snapshot of confidence and more a measure of imbalance.
You don’t see this setup often. When it shows up, it’s usually late in the cycle, after years of strong returns have pulled future gains forward.
Why the risk matters
Stocks move fast. Housing doesn’t. When most of the wealth effect is coming from something that can reprice in weeks instead of years, the economy becomes more sensitive to drawdowns. A selloff doesn’t just hit portfolios…it hits spending, hiring, and sentiment all at once.
The modern wrinkle is concentration. A big share of household equity exposure now sits inside index funds, and those indexes are increasingly driven by a handful of names. That means the system doesn’t need a broad collapse to feel pain. Stress in a few leaders can ripple outward quickly.
The historical warning
The last time this balance tipped was in the late 60s and late 90s and the adjustment didn’t come through housing strength. It came through equity underperformance over time. Not always dramatic, but persistent. Years where markets went sideways, valuations slowly came down, and investors learned that paper wealth can fade without a single obvious catalyst.
That’s the real risk here. Not an imminent crash, but a setup where the upside requires everything to keep going right while the downside only needs something small to go wrong.
This is a very interesting chart, as household stock wealth being higher than real estate wealth has only happened in the late 60s and late 90s, the last two times the ensuing bear market lasted years.
Beary Burry https://t.co/OqD3B7qGIl tweet
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Gold and silver track Japan’s 10 year because Japan has been the anchor of ultra low rates and cheap global funding for decades. When JGB yields rise, it signals that the market is questioning how long financial repression and debt monetization can hold. That pushes investors toward assets that don’t rely on central banks or government balance sheets. It’s not the yield itself, it’s what the move represents like rising sovereign risk, tighter global liquidity, and uncertainty about currency credibility. Gold responds as protection, and silver follows with more volatility.
tweet
Gold and silver track Japan’s 10 year because Japan has been the anchor of ultra low rates and cheap global funding for decades. When JGB yields rise, it signals that the market is questioning how long financial repression and debt monetization can hold. That pushes investors toward assets that don’t rely on central banks or government balance sheets. It’s not the yield itself, it’s what the move represents like rising sovereign risk, tighter global liquidity, and uncertainty about currency credibility. Gold responds as protection, and silver follows with more volatility.
🔥Gold and silver are moving almost perfectly in line with Japanese government bond yields:
Japan's 10-year government bond yield has risen roughly 1.5 percentage points since the beginning of 2023, reaching 1.98%, the highest level since the 1990s.
During this same period, gold and silver prices have skyrocketed by 135% and 175%, respectively.
Precious metals are being used as a primary hedge against the rising cost of government debt.
Incredible shift. tweet
EndGame Macro
Data Centers…Demand Is There, Permission Is Not
This isn’t about demand slowing for data centers. Demand is still there. What’s changing is the politics around them. DeKalb County’s extension of the moratorium is really about local pushback finally catching up with an industry that grew fast and quietly. Residents are focused on the tangible costs like noise, diesel generators, power and water usage, quality of life issues and local governments are responding by slowing things down so they can rewrite the rules.
Why the business model gets harder
For companies building and operating data centers, time suddenly matters a lot more. Delays push revenue out while costs keep running. New projects now face more permitting risk, more legal and community negotiations, and more required spending to mitigate environmental and health concerns. On top of that, the generous tax incentives that used to smooth approvals are increasingly under scrutiny, which compresses returns even further.
The irony is that constrained supply can lift pricing for existing, approved facilities, but it also makes growth less predictable. What used to be a fairly straightforward infrastructure play is turning into a capital intensive, politically exposed business. Going forward, the winners are likely the operators who already have sites permitted and plugged into the grid and the losers are the ones counting on frictionless expansion that no longer exists.
tweet
Data Centers…Demand Is There, Permission Is Not
This isn’t about demand slowing for data centers. Demand is still there. What’s changing is the politics around them. DeKalb County’s extension of the moratorium is really about local pushback finally catching up with an industry that grew fast and quietly. Residents are focused on the tangible costs like noise, diesel generators, power and water usage, quality of life issues and local governments are responding by slowing things down so they can rewrite the rules.
Why the business model gets harder
For companies building and operating data centers, time suddenly matters a lot more. Delays push revenue out while costs keep running. New projects now face more permitting risk, more legal and community negotiations, and more required spending to mitigate environmental and health concerns. On top of that, the generous tax incentives that used to smooth approvals are increasingly under scrutiny, which compresses returns even further.
The irony is that constrained supply can lift pricing for existing, approved facilities, but it also makes growth less predictable. What used to be a fairly straightforward infrastructure play is turning into a capital intensive, politically exposed business. Going forward, the winners are likely the operators who already have sites permitted and plugged into the grid and the losers are the ones counting on frictionless expansion that no longer exists.
DeKalb County extends data center moratorium amid public health concerns
#MacroEdge tweet
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MacroEdge (@MacroEdgeRes) on X
DeKalb County extends data center moratorium amid public health concerns
#MacroEdge
#MacroEdge
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Why Full Exposure Feels Good Until It Doesn’t
This is a positioning story. Retail investors are already heavily in stocks, and professional managers aren’t hanging back either, they’re close to fully invested. When everyone is leaning the same way, the market doesn’t get stronger, it gets more fragile. There just isn’t much new money left to push prices higher if something changes.
Why managers end up fully invested
It’s about incentives. Managers are judged against benchmarks and peers, constantly. Being cautious too early is usually worse for a career than being late. So they stay invested, ride what’s working, and assume they’ll dial back risk once conditions shift. The problem is that markets don’t usually give you a slow, polite warning. When things change, they tend to change fast.
Why this matters for retirees
For retirees, this doesn’t feel like being all in. It feels diversified…spread across funds, accounts, and strategies. But when managers across the system are near max exposure, those distinctions matter less. When volatility spikes, risk isn’t reduced ahead of time. It’s reduced after prices are already falling. That means selling into weakness and locking in losses at exactly the wrong moment when stability matters most.
We’ve seen this setup before
No major financial crisis including 1907, 1929, 2000, or 2008 started with managers defensively positioned. They all started with confidence, crowding, and high exposure. Risk only came off after liquidity broke, volatility surged, and correlations snapped higher.
This kind of setup isn’t a timing signal. It’s a risk signal. When positioning is this full, upside gets harder and downside tends to arrive faster than people expect, not because everyone is wrong, but because everyone is already in.
tweet
Why Full Exposure Feels Good Until It Doesn’t
This is a positioning story. Retail investors are already heavily in stocks, and professional managers aren’t hanging back either, they’re close to fully invested. When everyone is leaning the same way, the market doesn’t get stronger, it gets more fragile. There just isn’t much new money left to push prices higher if something changes.
Why managers end up fully invested
It’s about incentives. Managers are judged against benchmarks and peers, constantly. Being cautious too early is usually worse for a career than being late. So they stay invested, ride what’s working, and assume they’ll dial back risk once conditions shift. The problem is that markets don’t usually give you a slow, polite warning. When things change, they tend to change fast.
Why this matters for retirees
For retirees, this doesn’t feel like being all in. It feels diversified…spread across funds, accounts, and strategies. But when managers across the system are near max exposure, those distinctions matter less. When volatility spikes, risk isn’t reduced ahead of time. It’s reduced after prices are already falling. That means selling into weakness and locking in losses at exactly the wrong moment when stability matters most.
We’ve seen this setup before
No major financial crisis including 1907, 1929, 2000, or 2008 started with managers defensively positioned. They all started with confidence, crowding, and high exposure. Risk only came off after liquidity broke, volatility surged, and correlations snapped higher.
This kind of setup isn’t a timing signal. It’s a risk signal. When positioning is this full, upside gets harder and downside tends to arrive faster than people expect, not because everyone is wrong, but because everyone is already in.
Investment Managers now have close to 100% exposure to the stock market 🚨🚨 https://t.co/tFuKfiE14s tweet
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The Few Bets That Matter
Imagine the size of demand if retail image generation forced a major player to shift R&D compute R&D to production.
A bubble? Hm...
We have so many features, so many products we wanna launch, that get held back because we don't have enough compute
https://t.co/WZKzLyFVNz
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Imagine the size of demand if retail image generation forced a major player to shift R&D compute R&D to production.
A bubble? Hm...
We have so many features, so many products we wanna launch, that get held back because we don't have enough compute
https://t.co/WZKzLyFVNz
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https://t.co/VMNQAOybUq
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https://t.co/VMNQAOybUq
Fed's Waller: We are not seeing the job market go off a cliff tweet
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Fiscal.ai
Shares of Roblox are now down 23% since they added 40 million DAUs in a single quarter.
$RBLX https://t.co/vUcex9YYQM
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Shares of Roblox are now down 23% since they added 40 million DAUs in a single quarter.
$RBLX https://t.co/vUcex9YYQM
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Dimitry Nakhla | Babylon Capital®
Oracle is now down 40%+ from its highs
After peaking at ~46x earnings, $ORCL multiple has been nearly halved
That’s the risk of chasing stocks at euphoric valuations — when sentiment cools, multiple compression can do far more damage than fundamentals
$ORCL balance sheet 🚨 https://t.co/D6F5yFHBcD
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Oracle is now down 40%+ from its highs
After peaking at ~46x earnings, $ORCL multiple has been nearly halved
That’s the risk of chasing stocks at euphoric valuations — when sentiment cools, multiple compression can do far more damage than fundamentals
$ORCL balance sheet 🚨 https://t.co/D6F5yFHBcD
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EndGame Macro
Why JPMorgan Is Locking In Yield Now
JPM is moving money that earns whatever the Fed pays today into Treasuries that lock in a yield for longer. It’s less about making a call on the next meeting and more about getting set for the next phase of the cycle.
What they expect from the Fed and the economy
In my opinion JPM sees rates drifting lower and growth slowing, not reaccelerating. In that world, cash stops being attractive pretty quickly. Every cut makes reserves less valuable. Treasuries, on the other hand, do two things at once..they hold their yield and they tend to rise in price when the Fed leans easier. That’s a good trade if you think policy support is about stability, not reflation.
There’s also a plumbing angle. When the Fed steps away from QT, it’s usually because the system needs breathing room. Banks that remember 2019 and 2008 know how fast liquidity can matter again.
Why history backs this up
JPM has been here before. In 2019, small reserve changes turned into a repo shock. In 2008, the institutions with clean collateral and flexibility survived while others scrambled. And in 2022, loading up on duration too early was a painful lesson many banks learned the hard way.
This is JPM preparing for a softer economy, easier policy, and a market that starts caring less about squeezing returns and more about staying liquid. When a bank this size makes a move like this, it’s usually about being early to what matters next.
tweet
Why JPMorgan Is Locking In Yield Now
JPM is moving money that earns whatever the Fed pays today into Treasuries that lock in a yield for longer. It’s less about making a call on the next meeting and more about getting set for the next phase of the cycle.
What they expect from the Fed and the economy
In my opinion JPM sees rates drifting lower and growth slowing, not reaccelerating. In that world, cash stops being attractive pretty quickly. Every cut makes reserves less valuable. Treasuries, on the other hand, do two things at once..they hold their yield and they tend to rise in price when the Fed leans easier. That’s a good trade if you think policy support is about stability, not reflation.
There’s also a plumbing angle. When the Fed steps away from QT, it’s usually because the system needs breathing room. Banks that remember 2019 and 2008 know how fast liquidity can matter again.
Why history backs this up
JPM has been here before. In 2019, small reserve changes turned into a repo shock. In 2008, the institutions with clean collateral and flexibility survived while others scrambled. And in 2022, loading up on duration too early was a painful lesson many banks learned the hard way.
This is JPM preparing for a softer economy, easier policy, and a market that starts caring less about squeezing returns and more about staying liquid. When a bank this size makes a move like this, it’s usually about being early to what matters next.
JPMORGAN PULLS $350 BLN FROM FEDERAL RESERVE TO BUY UP TREASURIES - FT tweet
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First Squawk (@FirstSquawk) on X
JPMORGAN PULLS $350 BLN FROM FEDERAL RESERVE TO BUY UP TREASURIES - FT