Every so often, a stock makes Wall Street stop in its tracks. Yesterday, that stock was Oracle (ORCL). The company’s shares exploded higher, surging as much as 43% in a single day — its best one-day performance since 1992 — after unveiling a staggering $455 billion in contracted future revenue (RPO), a 359% increase year-over-year. Oracle says it could cross $500 billion in RPO within months, powered by multi-year AI infrastructure deals. Larry Ellison even leapfrogged Elon Musk to become the world’s richest man briefly.
But is this Oracle’s Nvidia moment… or just 1999 déjà vu? Let’s step into the ring.
The Debate
Bull: “Look at the backlog: $455B in RPO, triple what Wall Street expected. This isn’t hype — these are contracts. Safra Catz says it’s heading to $500B+. That’s locked-in demand through 2030.”
Bear: “Contracts with who? OpenAI. A company burning billions in cash and reliant on outside funding. Unlike Nvidia, which sells GPUs today and books cash today, Oracle is betting on fragile customers who may not even survive.”
Bull: “OpenAI may be cash-hungry, but they’re not alone. Google just put Gemini on Oracle Cloud. Multi-billion-dollar deals are stacking up across hyperscalers. Only four firms — Oracle, Microsoft, AWS, Google — can supply AI infrastructure at this scale. That’s a moat.”
Bear: “Moat or not, Oracle still missed earnings: $1.47 EPS vs $1.48 expected, $14.93B revenue vs $15.04B. If this were truly Nvidia-like demand translating into profits, they’d be beating, not missing. The hype is masking weak fundamentals.”
Bull: “You’re obsessing over a penny miss. Who cares? The $144B cloud revenue forecast by 2030 is what matters. That’s a 70% CAGR, already underpinned by signed obligations. Nvidia’s surge in 2023 was driven by future forecasts too — and it became a $4.2T giant.”
Bear: “And how much will it cost to chase those numbers? Oracle’s CapEx is jumping 65% to $35B this year. That’s free cash flow gone. If margins tighten or demand cools, those obligations won’t save them. They’ll just be building empty data centers.”
Bull: “CapEx is an investment, not a liability. As Evercore’s Kirk Materne said, long-term holders will accept near-term cash burn to secure a leadership position in AI infrastructure. You don’t win the future by pinching pennies.”
Bear: “You don’t win by ignoring history either. Oracle surged 31% in a single day in 1999 on internet hype. Within three years, it was back to $9. Yesterday’s 43% spike has the same bubble DNA. Markets overreact, and this looks like textbook euphoria.”
Bull: “This isn’t 1999. Back then, the internet demand story was speculative. Today, AI spending is projected at $1.3T over the next four years (IDC). Hyperscalers have already committed $400B this year alone. This demand is real, not vapor.”
Bear: “Real demand, fragile value chain. Oracle isn’t selling GPUs for cash like Nvidia. It’s selling multi-year capacity to firms still figuring out how to monetize AI. If their business models wobble, Oracle’s backlog shrinks overnight.”
Bull: “Yet the market has spoken: Oracle is up 45% YTD, outpacing the S&P 500’s 11%. Yesterday’s rally added over $200B in market value. Investors clearly believe this is the next Nvidia story.”
Bear: “Or investors are chasing another bubble. Remember, bubbles always look like unstoppable momentum — right before they burst.”
History Speaks
Oracle 1999: Soared 31% in one day on dot-com hype, only to crash to $9 within three years.
Nvidia 2023: Gained $200B in a day on AI chip demand — and kept compounding to become a $4.2T titan by 2025.
Oracle stands at the same crossroads today. Will it be the next Nvidia… or the next 1999 Oracle?
Reader’s Strategy Box
If you’re looking at this AI frenzy and wondering where the next Oracle might be, pay attention to Microsoft. Its earnings are due at the end of October, it’s sitting on a fortress balance sheet, and it has the deepest partnership with OpenAI. Unlike Oracle’s fragile customer chain, Microsoft is both a funder and a user of AI — giving it durability. If Oracle was yesterday’s surprise, Microsoft could be tomorrow’s.
Closing Thought
Oracle has lit up Wall Street with one of the most dramatic rallies in tech history. Bulls see a half-trillion-dollar backlog as proof the AI boom is real. Bears see fragile customers, ballooning costs, and a bubble echoing 1999.
Is Oracle the next Nvidia, or the next cautionary tale?
What’s your take? Should we debate Microsoft’s October earnings next?