according to the materials of the site - By Tokenist
Over the past week, the stocks of Nvidia (NVDA) and Oracle (ORCL) fell by 0.8% and 10% respectively. The Nasdaq 100 (NDX) technology index followed suit, decreasing by 0.11%. While Nvidia represents the forefront of hardware due to its dominance in AI-focused graphics processors, Oracle represents outdated software implemented in government agencies and enterprises.
To a greater extent, after the inauguration of President Trump, Oracle is closely linked to AI through the $500 billion joint venture Stargate created by Oracle, OpenAI, and SoftBank, with support from Nvidia, Arm, and Microsoft.
It is enough to say that Stargate is the economic foundation of Trump's second term, contributing to the reindustrialization of America, strengthening national security/monitoring, and expanding digital and energy infrastructure.
A year ago, we actively opposed the 'bubble' concept in the AI sector, and our predictions turned out to be correct, as stocks of companies working in AI and related fields, such as Micron (MU), surged by double and triple-digit percentages. However, this was before the acceleration of cyclical funding for GPU deal development.
Given Oracle's influence in this sector and the fall of its stock after the release of its second quarter 2026 earnings report on Wednesday, should investors view this as a harbinger of an AI bubble collapse?
During the conference call following the first quarter (2026 fiscal year) in September, Oracle's Executive Chairman Larry Ellison noted that the company is 'significantly ahead of any other application development company' in terms of creating applications using AI. Combined with Oracle's deep understanding of the database sector, Ellison concluded that his business is 'better prepared than anyone to leverage data output capabilities.'
Taking this into account, Oracle forecasts that by the end of 2025, the amount of remaining performance obligations (RPO) will exceed $500 billion, reaching $455 billion this quarter. For a software as a service (SaaS) company like Oracle, the RPO (Return to Proof) metric is a key indicator by which the company estimates the total future revenue from contracts that have yet to be fulfilled. In other words, RPO is the total dollar value of the company's order book that cannot be canceled due to contractual obligations.
Turning to the latest results for the second quarter released on Wednesday, Oracle indeed exceeded the RPO metric, reaching $523 billion, representing a 438% year-over-year increase. However, the company's revenue for the quarter was $16.06 billion, below the forecasted LSEG $16.21 billion.
The bulk of the company's revenue came from cloud technologies — $8 billion (up 34%), while the fastest-growing segment is cloud infrastructure as a service (IaaS) — $4.1 billion (up 68%). Oracle's cloud applications segment grew by 11% to $3.9 billion.
Compared to the same quarter last year, Oracle's net income as a percentage of revenue increased from 22% to 38%, effectively doubling to $6.135 billion. What conclusion can be drawn from this?
Oracle certainly has a strong indicator of future growth as the company significantly exceeded its RPO forecast. However, the revenue shortfall indicates that the conversion of this vast RPO portfolio is still in its early stages. More importantly, the growth of high-margin cloud services supports this growth outlook.
Overall, Oracle's second-quarter results confirm the company's successful transformation in AI/cloud technologies/infrastructure. Perhaps even more importantly, investors should not underestimate Larry Ellison's influence on the Trump administration.
With the recent launch of the 'Trump Gold Card' to streamline the citizenship process, it becomes increasingly clear to what extent Trump's presidency is transactional in nature. Even more telling is that in October, while speaking in the Knesset, President Trump revealed the extent of his personal and administrative commitment to Israeli interests:
"Miriam and Sheldon came to the office. They called me, he called me. I, I think he, I think they made more trips to the White House than anyone else I can remember. Look at her, she sits there so innocently. She has $60 billion. $60 billion."
Zionist billionaire Ron Lauder later confirmed this, noting that Sheldon Adelson was 'the State Department in one person'... 'not only during Trump's time but also during Biden's and all other times.'
However, as major sponsors of Trump, the Adelsons, along with Lauder, are only a small part of this network of influence. Larry Ellison shares the same social, political, and sponsorship interests as Alex Karp, CEO of Palantir.
In fact, it is difficult to find any part of the Trump administration that is not closely connected to him: from Secretary of State Marco Rubio, where Steve Witkoff is the direct policy developer, to Commerce Secretary Howard Lutnick.
Ellison's acquisition of TikTok and CBS News through the parent company Paramount Global should be viewed in this light.
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