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- [Audio] The Ingredients for Stock Bubble is All Ready
[Audio] The Ingredients for Stock Bubble is All Ready
After a massive $300 billion cloud deal with OpenAI caused its stock to surge, Oracle is turning to debt to fund its expansion. This pivotal shift challenges cash-rich big-tech companies, potentially igniting a fierce spending war and creating the perfect conditions for a speculative, debt-fueled AI market bubble.
DoitDuit | Your Investing Friend
September 18, 2025
The past week was crazy.
Oracle share price KABOOM
Oracle share price shot up 36% in one day, mind you that Oracle was a ~US$700 billion giant then. Today the company is worth ~US$870 billion, making Larry Ellison (co-founder of Oracle) the richest man in the world.
What is the reason for this sudden share price increase? From Oracle’s latest quarterly report earnings call:
We have signed significant cloud contracts with the who's who of AI, including OpenAI, xAI, Meta, NVIDIA, AMD and many others. At the end of Q1, remaining performance obligations, or RPO, now to $455 billion. This is up 359% from last year and up $317 billion from the end of Q4. Our cloud RPO grew nearly 500% on top of 83% growth last year…
I expect we will sign additional multibillion-dollar customers and that RPO will likely grow to exceed $0.5 trillion. The enormity of this RPO growth enables us to make a large upward revision to the cloud infrastructure portion of our financial plan. We now expect Oracle Cloud Infrastructure will grow 77% to $18 billion this fiscal year and then increase to $32 billion, $73 billion, $114 billion and $144 billion over the following 4 years. Much of this revenue is already booked in our $455 billion RPO number, and we are off to a fantastic start this year.
Oracle is expecting its Cloud Infrastructure segment will have the following future revenue:
Year | Cloud Infra Estimated Revenue |
|---|---|
FY2025 (ending May 2025) | US$10.2 billion (actual) |
FY2026 (ending May 2026) | US$18 billion |
FY2027 (ending May 2027) | US$32 billion |
FY2028 (ending May 2028) | US$73 billion |
FY2029 (ending May 2029) | US$114 billion |
FY2030 (ending May 2030) | US$144 billion |
US$300 billion of the US$317 billion incremental remaining performance obligation (RPO) that Oracle secured in this quarter came from OpenAI, as reported by Wall Street Journal:
OpenAI US$300 billion deal with Oracle
Note that the annual run rate of the 3 biggest cloud infrastructure are as below:
Amazon Web Services (AWS) | ~US$125 billion |
|---|---|
Microsoft Azure | ~US75 billion |
Google Cloud | ~US55 billion |
Oracle was “just” a database player, and never a hyperscaler (biggest type of data center) contender. So the entrance of Oracle into the AI space with such huge contract marks a very strong signal to the market.
Behind the paywall, we discuss more on why this can be the start of the AI bubble, our thought on how things may turn out and how investors should prepare themselves.
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