Investor Daily l: Is Now the Time to Buy Oracle? Cloud Profits, & Risks

In this Market Mondays clip, Ian Dunlap and Troy Millings dive into Oracle’s latest stock pullback and tackle the burning question: Is now the right time to buy Oracle shares? The conversation breaks down everything investors need to know—including the timing of Oracle’s cloud profitability, the challenges of CAPEX spending, and the shift in market sentiment. Ian Dunlap emphasizes patience, advising investors to wait until Oracle dips closer to $160 before considering an entry point. He highlights how the overall market environment has shifted, urging viewers not to expect every tech company to produce Nvidia-like returns. Troy Millings adds depth by dissecting the nature of cloud profitability, noting that significant returns are often “future dated”—it took Amazon and Google years to generate meaningful profits in their cloud divisions. He draws comparisons to Microsoft’s Azure, explaining that Oracle is following a proven path, even as it faces margin pressure and intense scrutiny. The duo also unpacks Oracle’s position as the fourth-largest cloud provider in the U.S., the spike in credit default swaps, and the impact of negative sentiment as the company’s massive investments raise eyebrows. Troy discusses how Oracle’s evolution—from enterprise software to subscriptions, to AI, and now cloud services—shows resilience, but also warns that market and government connections (like those with Larry Ellison) play a significant role in Oracle’s prospects. For anyone trying to navigate the choppy waters of tech stocks, this analysis offers historical insight, practical entry strategies, and candid takes on where Oracle might be heading next. Don’t miss out if you’re watching cloud stocks or considering Oracle for your portfolio. *Chapters Include:*

• Oracle’s Stock Pullback: Buy Now or Wait?
• Cloud Profitability: The Long Play for Investors
• Oracle vs. Amazon, Google, and Microsoft in the Cloud Race
• CAPEX and Margin Pressures Explained
• Market Sentiment & Credit Default Swaps: What Investors Should Know
• The Larry Ellison Factor: Government Ties & Future Outlook

*Drop a comment below:* Are you bullish or bearish on Oracle? Do you agree with Ian Dunlap’s price target or see a different opportunity? *Subscribe to Market Mondays for more sharp investing insights every week!* *#Oracle #CloudComputing #IanDunlap #TroyMillings #TechStocks #MarketMondays #Investing #OracleStock #LarryEllison #StockMarket*

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Episode Transcript

Speaker 1 (00:01):
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Speaker 2 (00:43):
Talking about a stock pullback, let's talk about Oracle. We
talked about it a little bit last week, but Oracle still,
you know, fighting its way out of its pullback.

Speaker 3 (00:56):
Is now the time to buy Oracle? I don't think so.

Speaker 4 (01:02):
Stock Club put in chat if I can put it
in one of the prices, I think.

Speaker 3 (01:10):
You definitely need to wait to.

Speaker 4 (01:13):
One at least one sixty before you're willing to pull
the trigger. If you look at the Fibonacci from the
all time high, over the last five years. Is underneath
that fifty percent marks two or two seventy three. That's
usually not a good sign. But there is a place
where it's sitting where there is some signs true. I

(01:34):
don't know if you want to queue it up, but
there is a place that I do like to start
to look to buy an asset. One thing I will say, though,
we have to stop looking for companies to give in
Vidia like returns that are not in video, because then
even in video aren't going to be going to be
able to give those returns that they've had since twenty
twenty one. It's a different market, it's a different climate.

(01:58):
The truth about the economy is coming up out a
lot faster. People are starting to brace for a recession,
and risk is all for most hedge funds. So if
you like it, you have to like it at the
right price. But if it's really at its fair value
price for where it should be.

Speaker 3 (02:16):
But I would definitely wait for.

Speaker 4 (02:17):
Like that one sixty area to start to acquire equities
and in this company.

Speaker 1 (02:22):
Yeah, I'll start by saying this, and this is important
to know. Cloud profitability is future dated, right, So if
you're writing notes, write that down in your notes. Cloud
profitability is future dated, meaning that there's going to be
profits down the road, but it takes time.

Speaker 3 (02:39):
And so what happened to Oracle.

Speaker 1 (02:41):
Yes, we've talked about the investment that they've made, and
the idea is if you build it, they will come.
The reality is that you have to build it, and
the problem that people are seeing is that the cost
that it's going to take to build is really strenuous
on its capex, which is interesting because that it feels
like a natural thing. If we're going to spend more

(03:02):
to make more, that we need that time period to
do it. The problem is that their cloud service in
the immediate standpoint was growing, and so what did I say.

Speaker 3 (03:10):
I wanted to see.

Speaker 1 (03:11):
I wanted to see if the cloud business was continued
to growing, to continue to grow, and it did, right,
they add a new customers, the crowd business went from
I think thirty two percent up to thirty nine percent
of forty percent.

Speaker 3 (03:23):
That's a good sign.

Speaker 1 (03:24):
So I start studying who else in the cloud service
business has had this type of run.

Speaker 3 (03:30):
Right, So we got to go back to the pioneer
of all this.

Speaker 1 (03:32):
Right, when we talk about cloud service, it starts with
AWS in two thousand and six. In two thousand and six,
people were not talking about cloud. In fact, they weren't
even worrying about the profitability because that was not the
core focus of Amazon's business. Right, this is an e
commerce thing. They add this as a derivative to their portfolio.
Ten years down the line. Now AWS is the thing

(03:54):
that we know it and it's profitable. Two thousand and eight.
Amazon season not Google sees the same. Right, they watched
what Amazon did. They created Google Cloud, same thing. Right,
we got to pioneer with AWS, We got the technology,
and they led into adaption into the Google space. Now
that becomes a revenue for them six years down the line.
So now we're talking to twenty sixteen, we're starting to
see profitability. Oracle just turned over to a cloud business

(04:18):
in twenty eighteen, So we're right in that that frame
here of where are we going to see profitability from it?
It just so happens that it's coming at the same
time as a CAPEC spin. I'm going to give you
another company, and I'm gonna tell you what the report
said inside the cloud space. This company, the cloud business
was growing fast, but it wasn't yet dominant. We already
know that Oracle is number four in the space, right,

(04:39):
we talked about the other other three. This company, they
said that they had a heavy cloud capex depressing their margins, right,
so the amount of money they were spending, the margins
were getting dinner.

Speaker 3 (04:49):
How are we going to pay for this?

Speaker 1 (04:50):
They said their software still was the core profit engine,
very similar to Oracle. They also said that their market
was unsure if the company could really pivot from being
a software where to a cloud service. You know what
that company's name was, which one absorbed by Microsoft. Now
if we look at it today, it's number three in
the cloud space. And so when I'm telling you that

(05:12):
profitability takes time and it's future dated, that's what we're
saying here. The issue here is obviously AI in the
mix of all of this, right, and so now when
we look at Oracle, it's like, hey, they've reinvented themselves
a few times already. They started out as enterprise software.
They went from enterprise software to subscriptions. Now they're going
from subscriptions right in that AI software to now cloud

(05:34):
service and obviously everything comes to the AI. It's going
to take time. Are they at the prime place? Well,
There's this guy listened to every Monday. His name is
Ian Dunlap. He talks about this moving average for the
four hundred day moving average. Ian Oracle is sitting at
one three eighty two. That is representation of.

Speaker 3 (05:56):
What give them my levels at the market.

Speaker 1 (06:03):
It is currently at it's four hundred day e m A,
which is a sign. And I'll leave it at that
if you know, you know, But Oracle is not going anywhere.
The cloud space is going to be a space that
they're going to play a part in. Obviously they are
number four UH in the United States five globally. But

(06:26):
I think were what's happening is now you're starting to
see the sediment changed. The same way we talked about
the positive sediment when we're talking about Tesla and Eli Musk,
you're seeing negative sentiment around Oracle. You've see credit, the
false swaps, I mean the credit the false which is crazy,
have spiked through the roof, meaning people are saying, look,
we're gonna bet that if they can't pay.

Speaker 3 (06:47):
It right, we need to make money off of it.

Speaker 1 (06:49):
We're betting on them not outside, they're betting on them
not being able to pay this off. I think that's
interesting and people are making money off that. In the
short term, I think this is oracle be to stay.
You're talking about the third or fourth wealth wealthiest person
in the world. When we're talking about Larry Ellison, obviously
he has government backing.

Speaker 3 (07:08):
On his side.

Speaker 1 (07:09):
This will this will turn around. But it's an interesting
point right now that it's out.

Speaker 3 (07:13):
Can I play Devil's advocate real quick?

Speaker 4 (07:15):
Will people be so pro oracle if he didn't have
Trump in his back pocket? Because prior to him getting in, Yeah,
most people weren't not looking at.

Speaker 3 (07:30):
Larry in the way that he should be revered. But
the stock was not a tech darling.

Speaker 1 (07:35):
You're right, and I think yes, I'm going to say yes,
And I'm not saying because of this administration. Right, I'm
thinking when he was president last time, So when he
was forty five, the tea leaves were there. Right when
we're talking about who's getting cloud contracts from the government,
who's making the tik tok fiasco, who's going to be

(07:56):
the cloud server for them, that's worked in this favor. Obviously,
now when we're talking about opening Eye and Stargate, that's
worked in his favor. So is he a huge donor
of that campaign one thousand percent. Have we seen a
clear pattern of how he makes sure that the people
that are closest to him and take care of him
are being taken care of earners.

Speaker 3 (08:18):
What's up?

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