In a recent discussion about Oracle Corp.’s significant $455 billion backlog, CNBC’s Jim Cramer suggested that the surge is largely attributable to the company’s ambitious ‘Stargate’ AI infrastructure project. Cramer took to social media to express his amazement at both Oracle’s evolving business landscape and the striking 359% increase in their pipeline.
In his posts, Cramer stated his confusion over the origins of such a backlog, questioning, “Trying to figure out how much of that backlog for Oracle is Stargate because I don’t know who else would be placing those orders.” He went on to comment on what he termed as “panic buying” in Oracle’s stock, indicating a remarkable level of purchasing activity reminiscent of what he described as unprecedented for a large-cap stock. He pondered the implications of the heavy short positions that might be at play, further hinting at a complex market dynamic.
Oracle’s stock experienced a notable 28.36% increase during after-hours trading, despite the company reporting first-quarter earnings that narrowly missed Wall Street’s expectations. The earnings report indicated $1.47 per share with revenues of $14.92 billion, both slightly falling short of analyst predictions. Yet, the market’s reaction primarily centered on the company’s Remaining Performance Obligations (RPO), which is a key metric for assessing future contracted revenue.
The remarkable RPO surge to $455 billion has sparked considerable interest among investors, with Oracle’s CEO, Safra Catz, confirming that the growth was driven by four multi-billion-dollar contracts signed with three different customers in the first quarter. Catz also noted that the RPO could exceed half-a-trillion dollars in the coming months, signaling a strong upward trajectory for the company’s cloud infrastructure division.
Cramer’s focus on the Stargate project adds an intriguing layer to Oracle’s reported figures. This initiative, announced earlier in the year and backed by notable partners including OpenAI and SoftBank, is designed as a massive investment commitment to create an expansive network of AI data centers in the United States. The partnership aims to allocate up to $500 billion, positioning Oracle’s cloud infrastructure as a pivotal player in the future of artificial intelligence and necessitating extensive cloud computing resources.
The enormity of the Stargate project aligns well with the scale of Oracle’s backlog, and as the market digests this information, interested stakeholders are keenly watching how this could drive the future of cloud computing while transforming Oracle’s operational landscape.
As investors look to navigate the evolving market dynamics and assess opportunities for diversification, many might explore various investment platforms offering access to real estate or alternative assets. With options to invest in fractional shares of properties, fixed-income bonds, or self-directed retirement accounts, a strategy encompassing multiple asset classes can become vital for managing risks and achieving long-term financial goals. The emphasis is increasingly on creating portfolios that withstand economic volatility and leverage the potential of innovative ventures like the Stargate project.
