We’ve discussed Oracle (ORCL) extensively today:\u00a0\u00a0<\/p>\n
Which Way Wednesday – PPI & Oracle (ORCL) Edition<\/a><\/p><\/blockquote>\n<\/iframe><\/p>\n<div id=\"model-response-message-contentr_9b48e37afaca8e01\" class=\"markdown markdown-main-panel tutor-markdown-rendering force-compact-layout enable-updated-hr-color\" dir=\"ltr\">\n<p><span class=\"citation-0 recitation citation-end-0\">A massive overnight surge in Oracle’s (ORCL) valuation has presented a significant investment opportunity.<sup class=\"superscript embedded\" data-turn-source-index=\"1\">1<\/sup><\/span> <span class=\"citation-1 recitation citation-end-1\">While the company slightly missed earnings expectations, it reported a staggering 359% increase in its Remaining Performance Obligations (RPO), which now stands at an incredible $455 billion.<sup class=\"superscript embedded\" data-turn-source-index=\"2\">2<\/sup><\/span><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/publish.finviz.com\/091025\/ORCLd114674878i.png\" alt=\"Finviz Chart\" \/><\/p>\n<p><b>Understanding the Premise:<\/b><\/p>\n<ul>\n<li>\n<p><b>What is RPO?<\/b><span class=\"citation-2 recitation citation-end-2\"> RPO, or Remaining Performance Obligations, is a key metric representing the total value of contracted future revenue that has not yet been recognized.<sup class=\"superscript embedded\" data-turn-source-index=\"3\">3<\/sup><\/span> In essence, it is Oracle’s backlog. This $455 billion figure indicates that the company has already secured future business equivalent to more than six times its current annual revenue.<\/p>\n<\/li>\n<li>\n<p><b><span class=\"citation-3 recitation\">The AI Infrastructure Boom:<\/span><\/b><span class=\"citation-3 recitation citation-end-3\"> This unprecedented backlog is being driven by the explosive growth in the Artificial Intelligence sector.<sup class=\"superscript embedded\" data-turn-source-index=\"4\">4<\/sup><\/span> Companies are entering into long-term, multi-billion dollar contracts with Oracle to secure the immense computing power and specialized cloud infrastructure required for AI and machine learning workloads. This transforms Oracle from a traditional software company into a foundational provider for the AI revolution, much like Taiwan Semiconductor (TSM) is for chip manufacturing.<\/p>\n<\/li>\n<li>\n<p><b>The “Boeing\/Airbus” Dynamic:<\/b> The article presents a compelling analogy, comparing the current cloud infrastructure landscape to the commercial aircraft market dominated by Boeing and Airbus. With Oracle now having a 6+ year backlog (similar to Boeing in the past), many enterprises that need immediate AI infrastructure will not be able to wait. This creates a significant opportunity for competitors to capture this “spillover” demand.<\/p>\n<\/li>\n<\/ul>\n<p><b>Our Trade Strategy:<\/b><\/p>\n<p>The primary trade idea is a long-term position on <b>Oracle (ORCL)<\/b> itself, designed to capitalize on its confirmed future growth while generating income. The proposed trade involves:<\/p>\n<ul>\n<li>\n<p><b>Selling long-dated puts<\/b> at a level we would be comfortable owning the stock, generating initial income.<\/p>\n<\/li>\n<li>\n<p><b>Buying a long-dated bull call spread<\/b> to capture the anticipated upside in the stock price.<\/p>\n<\/li>\n<li>\n<p><b>Selling shorter-dated calls against the long position<\/b> to continuously generate income and reduce the net cost of the trade.<\/p>\n<\/li>\n<\/ul>\n<p>In a Portfolio Margin account it\u2019s so far out of the money that it requires negligible margin so <strong><span style=\"color: #0000ff;\">let\u2019s sell 5 ORCL 2027 $250 puts for $20 ($10,000) in the STP.<\/span><\/strong><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>In the LTP, let\u2019s:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span style=\"color: #0000ff;\"><strong>Sell 5 ORCL 2027 $250 puts for $20 ($10,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Buy 20 ORCL Dec 2027 $300 calls for $113.50 ($227,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 15 ORCL Jan 2027 $380 calls for $60 ($90,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 10 ORCL Nov $350 calls for $28.50 ($28,500)<\/strong><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>That\u2019s net $98,500 on the $160,000+ spread (with a year to roll) so there\u2019s $61,800 (62.7%) upside potential on the spread over 16 months (and more into 2028) but the key to this play is that we just sold $28,500 (28.9%) of premium using just 72 days of our 828 days and that\u2019s not even selling puts so 10 more sales like that can be $285,000 (289%) and THAT is where we\u2019ll make our money on this trade!<\/strong><\/span><\/p>\n<p>This strategy allow us to have a bullish outlook on Oracle’s long-term potential while actively generating returns from the high premiums in the options market.<\/p>\n<p>Furthermore, the “Boeing\/Airbus” analogy opens up opportunities in other key players who are set to benefit from the immense demand for AI infrastructure:<\/p>\n<ul>\n<li>\n<p><b>The “Airbus” Competitors:<\/b><\/p>\n<ul>\n<li>\n<p><b>Microsoft (MSFT):<\/b><span class=\"citation-4 recitation citation-end-4\"> As a major cloud provider, Microsoft is well-positioned to absorb the demand from customers who cannot wait for Oracle.<sup class=\"superscript embedded\" data-turn-source-index=\"5\">5<\/sup><\/span><\/p>\n<\/li>\n<li>\n<p><b>Alphabet (GOOGL):<\/b> With its own advanced AI capabilities, Google Cloud is another prime beneficiary of the industry’s expansion.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p><b>The “Picks and Shovels” Plays:<\/b><\/p>\n<ul>\n<li>\n<p><b>Broadcom (AVGO) and Nvidia (NVDA):<\/b> These companies provide the essential hardware components (custom silicon and GPUs) that all cloud providers need to build out their infrastructure. They stand to profit from the overall growth of the AI sector, regardless of which cloud provider secures a particular contract.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>In summary, our trade premise is based on the highly visible and contracted growth of Oracle, fueled by the AI revolution. We are positioning to profit directly from Oracle’s trajectory and from the broader industry-wide expansion this massive demand will inevitably create.<\/p>\n<\/div>\n<p> <\/p>\n<p> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>We’ve discussed Oracle (ORCL) extensively today:\u00a0\u00a0 Which Way Wednesday – PPI & Oracle (ORCL) Edition A massive overnight surge in Oracle’s (ORCL) valuation has presented a significant investment opportunity.1 While the company slightly missed earnings expectations, it reported a staggering 359% increase in its Remaining Performance Obligations (RPO), which now stands at an incredible $455 […]<\/p>\n","protected":false},"author":8,"featured_media":12841675,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26305],"tags":[],"class_list":{"0":"post-12841674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-trades"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12841674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=12841674"}],"version-history":[{"count":1,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12841674\/revisions"}],"predecessor-version":[{"id":12841676,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12841674\/revisions\/12841676"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media\/12841675"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=12841674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=12841674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=12841674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/iframe><\/p>\n<div id=\"model-response-message-contentr_9b48e37afaca8e01\" class=\"markdown markdown-main-panel tutor-markdown-rendering force-compact-layout enable-updated-hr-color\" dir=\"ltr\">\n<p><span class=\"citation-0 recitation citation-end-0\">A massive overnight surge in Oracle’s (ORCL) valuation has presented a significant investment opportunity.<sup class=\"superscript embedded\" data-turn-source-index=\"1\">1<\/sup><\/span> <span class=\"citation-1 recitation citation-end-1\">While the company slightly missed earnings expectations, it reported a staggering 359% increase in its Remaining Performance Obligations (RPO), which now stands at an incredible $455 billion.<sup class=\"superscript embedded\" data-turn-source-index=\"2\">2<\/sup><\/span><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/publish.finviz.com\/091025\/ORCLd114674878i.png\" alt=\"Finviz Chart\" \/><\/p>\n<p><b>Understanding the Premise:<\/b><\/p>\n<ul>\n<li>\n<p><b>What is RPO?<\/b><span class=\"citation-2 recitation citation-end-2\"> RPO, or Remaining Performance Obligations, is a key metric representing the total value of contracted future revenue that has not yet been recognized.<sup class=\"superscript embedded\" data-turn-source-index=\"3\">3<\/sup><\/span> In essence, it is Oracle’s backlog. This $455 billion figure indicates that the company has already secured future business equivalent to more than six times its current annual revenue.<\/p>\n<\/li>\n<li>\n<p><b><span class=\"citation-3 recitation\">The AI Infrastructure Boom:<\/span><\/b><span class=\"citation-3 recitation citation-end-3\"> This unprecedented backlog is being driven by the explosive growth in the Artificial Intelligence sector.<sup class=\"superscript embedded\" data-turn-source-index=\"4\">4<\/sup><\/span> Companies are entering into long-term, multi-billion dollar contracts with Oracle to secure the immense computing power and specialized cloud infrastructure required for AI and machine learning workloads. This transforms Oracle from a traditional software company into a foundational provider for the AI revolution, much like Taiwan Semiconductor (TSM) is for chip manufacturing.<\/p>\n<\/li>\n<li>\n<p><b>The “Boeing\/Airbus” Dynamic:<\/b> The article presents a compelling analogy, comparing the current cloud infrastructure landscape to the commercial aircraft market dominated by Boeing and Airbus. With Oracle now having a 6+ year backlog (similar to Boeing in the past), many enterprises that need immediate AI infrastructure will not be able to wait. This creates a significant opportunity for competitors to capture this “spillover” demand.<\/p>\n<\/li>\n<\/ul>\n<p><b>Our Trade Strategy:<\/b><\/p>\n<p>The primary trade idea is a long-term position on <b>Oracle (ORCL)<\/b> itself, designed to capitalize on its confirmed future growth while generating income. The proposed trade involves:<\/p>\n<ul>\n<li>\n<p><b>Selling long-dated puts<\/b> at a level we would be comfortable owning the stock, generating initial income.<\/p>\n<\/li>\n<li>\n<p><b>Buying a long-dated bull call spread<\/b> to capture the anticipated upside in the stock price.<\/p>\n<\/li>\n<li>\n<p><b>Selling shorter-dated calls against the long position<\/b> to continuously generate income and reduce the net cost of the trade.<\/p>\n<\/li>\n<\/ul>\n<p>In a Portfolio Margin account it\u2019s so far out of the money that it requires negligible margin so <strong><span style=\"color: #0000ff;\">let\u2019s sell 5 ORCL 2027 $250 puts for $20 ($10,000) in the STP.<\/span><\/strong><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>In the LTP, let\u2019s:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span style=\"color: #0000ff;\"><strong>Sell 5 ORCL 2027 $250 puts for $20 ($10,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Buy 20 ORCL Dec 2027 $300 calls for $113.50 ($227,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 15 ORCL Jan 2027 $380 calls for $60 ($90,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 10 ORCL Nov $350 calls for $28.50 ($28,500)<\/strong><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>That\u2019s net $98,500 on the $160,000+ spread (with a year to roll) so there\u2019s $61,800 (62.7%) upside potential on the spread over 16 months (and more into 2028) but the key to this play is that we just sold $28,500 (28.9%) of premium using just 72 days of our 828 days and that\u2019s not even selling puts so 10 more sales like that can be $285,000 (289%) and THAT is where we\u2019ll make our money on this trade!<\/strong><\/span><\/p>\n<p>This strategy allow us to have a bullish outlook on Oracle’s long-term potential while actively generating returns from the high premiums in the options market.<\/p>\n<p>Furthermore, the “Boeing\/Airbus” analogy opens up opportunities in other key players who are set to benefit from the immense demand for AI infrastructure:<\/p>\n<ul>\n<li>\n<p><b>The “Airbus” Competitors:<\/b><\/p>\n<ul>\n<li>\n<p><b>Microsoft (MSFT):<\/b><span class=\"citation-4 recitation citation-end-4\"> As a major cloud provider, Microsoft is well-positioned to absorb the demand from customers who cannot wait for Oracle.<sup class=\"superscript embedded\" data-turn-source-index=\"5\">5<\/sup><\/span><\/p>\n<\/li>\n<li>\n<p><b>Alphabet (GOOGL):<\/b> With its own advanced AI capabilities, Google Cloud is another prime beneficiary of the industry’s expansion.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p><b>The “Picks and Shovels” Plays:<\/b><\/p>\n<ul>\n<li>\n<p><b>Broadcom (AVGO) and Nvidia (NVDA):<\/b> These companies provide the essential hardware components (custom silicon and GPUs) that all cloud providers need to build out their infrastructure. They stand to profit from the overall growth of the AI sector, regardless of which cloud provider secures a particular contract.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>In summary, our trade premise is based on the highly visible and contracted growth of Oracle, fueled by the AI revolution. We are positioning to profit directly from Oracle’s trajectory and from the broader industry-wide expansion this massive demand will inevitably create.<\/p>\n<\/div>\n<p> <\/p>\n<p> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>We’ve discussed Oracle (ORCL) extensively today:\u00a0\u00a0 Which Way Wednesday – PPI & Oracle (ORCL) Edition A massive overnight surge in Oracle’s (ORCL) valuation has presented a significant investment opportunity.1 While the company slightly missed earnings expectations, it reported a staggering 359% increase in its Remaining Performance Obligations (RPO), which now stands at an incredible $455 […]<\/p>\n","protected":false},"author":8,"featured_media":12841675,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26305],"tags":[],"class_list":{"0":"post-12841674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-trades"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12841674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=12841674"}],"version-history":[{"count":1,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12841674\/revisions"}],"predecessor-version":[{"id":12841676,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12841674\/revisions\/12841676"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media\/12841675"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=12841674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=12841674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=12841674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}