$ORCL · Jose Najarro Stocks · 2026-10-28

Oracle just gave us some crazy numbers and some things to kind of debate maybe in a bit, but uh I mean, I think we're going to see some strong cloud numbers and that's all I'm pretty much here for

Yeah. I I mean, based on what Oracle said, right, we're we're still going to go into a heavy capex in 2027 and 2028. Um, so I think the likelihood now of of it happening is is is yes, is high.

And we suddenly hear a couple of announcements this week. Oracle and Google's TPUs, OpenAI, Google TPUs.

and I don't know Neo or Tener if you guys saw kind of Oracle today had their investor day I do believe that's one of the reasons the Neocloud companies are running up um outside o of the Fed.

We they they did increase their um their guidance on on revenues. I I forget for what years. More importantly, they do mention that they're going to be free cash flow positive in the second half of 2028.

So So to me, I think that kind of eliminated one of the fears in the Neocloud market where it's like, oh, this was a a business that was never going to make money that they were just going to continue to invest and invest and invest.

But now Oracle kind of gave us the first timeline of when if Oracle is expecting to be free cash flow positive then what what do we expect kind of like the other NeoCloud players.

So I think there's a little hope was given um by Oracle today for a lot of these NeoCloud plays.

So what is your take Jose we got 7 minutes until the close on Oracle capping the capex uh raise at 20 billion over the next three years. Is that bearish or is that bullish because they become efficient enough to figure out how to bring GPUs online without spending more money?

>> I to me they they still mentioned that 2027 and 2028 are going to be peak capex. So to me that tells me there's going to be a growth in capix and if they're not going to raise as much money it's just telling me that the compute that they that they were investing a year ago two years ago are finally going to start turning on and that's going to start creating a nice amount of operating cash flow that will allow them to fuel this peak in capex without having to raise.

So I I I I I think one of the indications is is that that c uh the data centers are turning on revenue collection is going to be high enough that they no longer need to go too heavy on outside on on outside as as we heard from other players right it takes time to start having that revenue collection from these data centers maybe this is the timeline when we start to see that happening

>> so so what saying they they mentioned from now till 2030 they're only planning on raising if I remember correctly. >> Yeah. No, but the selfunding the self-unding part is fiscal 29.

>> Yeah. 20. Yeah. Selfunding 2029. But they mentioned they're going to step down capex. And I wonder if that's one of the reasons we saw kind of Nvidia drop. Um but yeah.

>> Yeah, but the the candles were like it was really taking or going down on the oracle news

Oracle just came out and said that they are going to be providing TPUs. This is the first external cloud that's going to be offering Google chips. That's a direct competitor to Nvidia.

It adds a completely new revenue line. It's high margin business as we know from Nvidia and Broadcom and many of these companies.

Given continued strong and exhilarating demand, we've recently entered into partnerships to deliver TPU systems with both Krux AAI and Oracle with more in the works.

I think that these companies are going to come out and start doing what Oracle did. if we just see constantly capex is spending more free cash flows going further and further negative that we want some real timelines that that's why I said 18 to 24 months.

I could see people in in the chat being like okay that seems like a long time but I I'm sort of looking towards 2027 or 2028 as being peak capex and I don't think that I I I think that these companies can suffer the entire time if they constantly are putting up worse and worse free cash flow numbers.

They said significantly higher capex in 2027 and that's what's taking us down this quarter. So why why would you expect anything else in 2027?

Oracle officially said 2029, you know, is going to be over.

Look at Lisa Sue's uh, assumptions for CPU demand right out into the future. I think in the last nine months she's increased the percent growth by uh or more than doubled it but like three separate increases 25% CPU demand 33% now it's like 50% uh kaggers for CPU demand so I think Oracle will update