Malcolm Ethridge Sells Oracle Stock Amidst Revenue Miss and OpenAI Uncertainty

Oracle's Earnings and Analyst Questions

• 📉 Malcolm Ethridge sold his Oracle shares at the open following a consequential earnings report.
• ❓ Ethridge sought answers to two key questions during the earnings call: the spending ceiling and the impact of OpenAI's commitments, neither of which were adequately addressed.
• 💡 Management indicated that spending would exceed $100 billion, but provided no clear limit.

Intertwined Relationship with OpenAI

• 🔗 The discussion highlights Oracle's significant intertwining with OpenAI, with revenue misses and high capex.
• ⚠️ The proximity to Sam Altman, once a positive, is now seen as a potential negative due to OpenAI's financial uncertainties.
• ❓ A critical unanswered question is how Oracle would be affected if OpenAI scaled back its $300 billion commitment.

Divergent Investor Perspectives

• 🤝 Jim Cramer is sticking with Oracle, building new positions with new money, citing the stock's current multiple and belief in OpenAI's long-term commitment.
• 🚀 He acknowledges the desire for better free cash flow and more sober capex but believes the current price is tempting.
• ⚠️ Bill Baruch sees significant support around $180 and a target of $260 by next year, emphasizing the execution phase and the need for revenue growth to match liabilities and capex.

Market Sentiment and Future Outlook

• 📉 The stock experienced its worst day since March 2001, with significant price target cuts from analysts.
• 🏦 Credit default swap (CDS) data shows a 9% gain on 5-year Oracle CDS, indicating market concern.
• 💡 The potential for OpenAI to file an S1 is discussed as a factor that could bring stability to Oracle's stock.
• ☁️ Despite concerns, Oracle's cloud infrastructure business grew over 50% year-over-year, indicating a solid underlying software business.