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

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0:42PNC Bank, National Association member, FDIC. Talking about a stock pullback, let's talk about Oracle. We talked about it a little bit last week, but Oracle still fighting its way out of its pullback. is now the time to buy Oracle? I don't think so. Stock Club, put in chat if I can put in one of the prices. I think you definitely need to wait to at least 160 before you are willing to pull the trigger. If you look at the Fibonacci from the all-time high over the last five years is underneath that 50 % mark, which is 202.73. That's usually not a good sign, but there is a place where it's sitting where there is some signs.

1:38I 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 NVIDIA-like returns that are not NVIDIA because then even NVIDIA aren't going to be able to give those returns that they've had since 2021. It's a different market. It's a different climate. The truth about the economy is coming out a lot faster. People are starting to brace for a recession and risk is off for most hedge funds. So if you like it, you have to like it at the right price. But it's really at its fair value price for where it should be.

2:20But I would definitely wait for that 160 area to start to acquire equities in this company. Yeah, I'll start by saying this, and this is important to know. Cloud profitability is future dated. 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. So what happened to Oracle? 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 feels like a natural thing.

3:05If we're going to spend more to make more, then 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 I wanted to see? I wanted to see if the cloud business was continuing to grow, and it did, right? They added new customers. The crowd business went from, I think, 32 % up to 39 % or 40%. That's a good sign. So I start studying who else in the cloud service business has had this type of run. So we got to go back to the pioneer of all this. When we're talking about cloud service, it starts with AWS in 2006. In 2006, people were not talking about cloud.

3:44In fact, they weren't even worrying about the profitability because that was not the core for it. What if mind control is real? If you could control the behavior of anybody around you, what kind of life would you have? Can you hypnotically persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. NLP, aka Neuro Linguistic Programming, is a blend of hypnosis.

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4:5910 years down the line, now AWS is the thing that we know it, and it's profitable. 2008, Google sees the same thing, right? They watched what Amazon did. They created Google Cloud. Same thing, right? We had 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 2016, we're starting to see profitability. Oracle just turned over to a cloud business in 2018. So we're right in 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 CapEx spend.

5:34I'm going to give you another company and I'm going to 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? We talked about the 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 thinner. How are we going to pay for this? 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 to a cloud service.

6:09Know what that company's name was? Which one? Azure 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 profitability takes time and it's future dated, that's what we're saying here. The issue here is obviously AI is 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 subscription. now they're going from subscriptions right in that AI software to now cloud service and obviously everything that comes in AI it's going to take time are they at the prime place well there's this guy I listen to every Monday his name is Ian Dunlap he talks about this moving average 400 day moving average Ian Oracle is sitting at 183.82 that is representation of what let me give him my levels i don't mark him it is currently sitting at its 400 day ema um which is a sign and i'll leave it at that if you know you know um but oracle is not going anywhere the cloud space is is going to be a space that they're going to play a part in um obviously they're number four uh in the united states five globally uh but i think we're what's happening is now you're you're starting to see the sentiment change the same way we talked about the positive sentiment when we're talking about tesla and eli musk you're seeing negative sentiment around oracle you've seen credit default swaps i mean the credit default swaps which is crazy have spiked through the roof meaning people are saying look we're gonna bet that if they can't pay it right we need to make money off of it we're betting on them not They're betting on them not being able to pay this off.

8:02I think that's interesting, and people are making money off that in the short term. I think Oracle will be here to stay. You're talking about the third or fourth wealthiest person in the world when we're talking about Larry Ellison. Obviously, he has government backing on his side. This will turn around, but it's an interesting point right now that it's at. Can I play devil's advocate real quick? Would 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 larry in the way that he should be revered but the stock was not a tech darling 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 45 the tea leaves were there right when we're talking about who's getting cloud contracts from the government, who's making the TikTok fiasco, who's going to be the cloud server for them.

9:05That's worked in his favor. Obviously, now when we're talking about opening AI and Stargate, that's worked in his favor. So is he a huge donor of that campaign? A 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? 100%. Ernest, what's up? You ever walk into a small business and everything just works? Like the checkout is fast, the receipts are digital, tipping is a breeze, and you're out the door before the line even builds. Odds are they're using Square. We love supporting businesses that run on Square because it just feels seamless.

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