$Oracle(ORCL)$ $NVIDIA(NVDA)$ $Synopsys(SNPS)$
π― Executive Summary
Iβm convinced Oracle is entering tonightβs earnings with the most asymmetric risk reward in global tech. The share price has fallen roughly 33 % from the highs near $330 to $220.75 on your chart, completely retracing the 20 % September earnings surge that briefly added $200B in market cap. Now traders are positioned for a violent event. The ATM IV term structure shows near expiry implied volatility above 140 % with a projected swing close to 10 %. This is where a half trillion dollars in AI cloud backlog commitments must be proven real and monetisable, not just headline potential.
π Bull Case
β’ Cloud Infrastructure revenue expected to grow 77 % this fiscal year to $18B, then scale to $32B, $73B, $114B and $144B over the next four years. The majority is already recorded in RPO.
β’ Mega deal flywheel: $300B OpenAI five year agreement from 2027, plus a multiyear $20B Meta cloud AI commitment and about $65B of total infrastructure wins from four major customers in only about 30 days.
β’ 50,000 GPU AMD supercluster launches Q3 2026 as the first publicly accessible massive scale GenAI compute cluster from any hyperscaler.
β’ AI Factory monetisation model drives accelerated backlog conversion, with Gemini and multicloud database deployment across AWS, Azure and Google creating enterprise lock in.
β’ Operating cash flow up 13 % YoY to $21.5B trailing with $12.1B short term deferred revenue, confirming RPO is already converting to operational dollars.
β’ Regional uplift: Asia Pacific at 11.95 % of revenue growing close to 25 % YoY on sovereign AI data infrastructure commitments.
β’ Vanguard and BlackRock added around 5M shares in Q3, showing institutions are buying the capex cycle, not fleeing it.
π» Bear Case
β’ Around 40 % of backlog comes from only a handful of hyperscale AI customers. Concentration risk is high if utilisation timing slips.
β’ Net debt has surged following around $18B in new bonds and forecasts show more than $26B in negative free cash flow over the next three years while buildout peaks.
β’ GPU scarcity and datacentre expansion pressure cloud infrastructure gross margins from around 79 % toward 77 % with monetisation lagging by around six to nine months.
β’ Multicloud deployment friction could slow backlog burn if 20 % of projects face integration delays.
β’ EU data sovereignty rules threaten EMEAβs 23.32 % revenue share.
β’ AI capex fatigue increasing as macro forecasts reduce sector capex growth around 15 %.
β’ Public sentiment shifting from headline backlog size to revenue quality scrutiny.
π° Financial Performance Breakdown
Tonight, consensus expects revenue between $16.15B and $16.18B up 14 to 15 % YoY and adjusted EPS of $1.65 vs $1.15.
Segment mix:
β’ Cloud Infrastructure roughly 15.14 % and accelerating above 50 % growth
β’ Cloud Applications 17.36 % growing mid teens
β’ Software 25.87 %
β’ Americas 64.73 %, EMEA 23.32 %, APAC 11.95 %
FY26 guidance targets 12 to 14 % total revenue growth and cloud revenue surpassing $25B.
More than 200 datacentres targeted by FY27.
π Options Volatility
ATM IV above 140 % and expected move near 10 % indicate traders bracing for a large reaction.
A $2M put buyer has hedged aggressively into the print suggesting protection not complacency.
Looking back five quarters:
β’ Realised earnings moves have exceeded implied expectations three times, including a 36 % reaction vs 8.7 % implied on the September OpenAI announcement
When Oracle surprises, it does so violently.
ππ Technical Setup
The 4H Keltner and Bollinger charts show price breaking above the long downtrend channel that dragged $ORCL from $330 to $190.
Daily net buy delta bars confirm accumulation near $205 to $215.
Key support:
β’ $210 primary
β’ $200 structural
β’ $180 critical
Key resistance:
β’ $235 breakout trigger
β’ $260 swing zone
β’ $280 stretch
A confirmed move above $235 with higher volume and Keltner band hold signals the end of the downtrend.
Targets $250 then $280.
Below $200, thesis pauses.
π Macro and Peer Context
Rates are shifting toward easing into 2026 which benefits long duration AI infrastructure bets.
AWS and Azure remain dominant but carry deeper complexity integrating AI across all workloads. Oracle is positioned as the high performance neutral data plane that hyperscalers must interoperate with.
Azure AI attach near 30 % vs around 20 % for Oracle shows runway for OCI as enterprise AI demand scales.
π Valuation and Capital Health
At $220.75 Oracle trades in the low to mid 30s forward PE with 70 plus % gross margins.
Credit ratings BBB with negative outlook, but interest coverage remains above 10 times so leverage is a calculated investment in AI infrastructure rather than distress.
Analyst price targets:
β’ High $400
β’ Average $330 to $335
β’ Low $175
TD Cowen sees a path to roughly $200B revenue, $80B EBIT and around $20 EPS over the long term if RPO continues converting successfully.
βοΈ Verdict and Trade Plan
I believe tonight decides whether RPO is recognised as revenue reality or speculative optionality.
Entry $217 to $225.
Stop below $200.
Confirmation above $235 turns the chart bullish.
Base target $250.
Stretch target $280.
Watch cash flow conversion, new mega deal disclosures and datacentre utilisation guidance.
π Conclusion
I am positioning for a decisive earnings resolution as the market finally prices whether Oracle is the next AI infrastructure giant or an over leveraged builder waiting too long for the payoff.
π Key Takeaways
β’ $ORCL at $220.75 is down about 33 % from the peak
β’ IV above 140 % implies a roughly 10 % earnings move
β’ AI deals: $300B OpenAI, $20B Meta, $65B recent wins
β’ FY26 guide: 12 to 14 % revenue growth, cloud over $25B
β’ Supports $210 and $200, breakout above $235
β’ Targets $250 and $280 if confirmation holds
π’ Donβt miss out! Like, Repost and Follow me for exclusive setups, cutting edge trends, and insights that move markets ππ Iβm obsessed with hunting down the next big movers and sharing strategies that crush it. Letβs outsmart the market and stack those gains together! π Trade like a boss! Happy trading ahead, Cheers, BC πππππ
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Comments
got the same vibe shift, markets in NZ timing always hits at the weirdest hour ππ₯π‘π§
Great article, would you like to share it?