00:00It's hard to really know what to make of these numbers here. Give me your first impression
00:03overall as to what you saw in the most recent quarter and also what you make of the guidance.
00:09Yeah, absolutely. Look, I think you hit the nail on the head. These are by any stretch,
00:13objectively, really strong numbers. If we look at the RPO, we look at the OCI growth. But when
00:18you've had a 50 percent bounce off the bottoms and there's jitteriness, not just around the AI
00:23trade, but how Oracle will pay for them around the certainty of some of the future numbers
00:28and importantly around CapEx. And we don't have a CapEx guide yet. We're waiting for the call,
00:33but we've obviously seen component price inflation. All the other hyperscalers have
00:38talked about that. Memory prices have gone through the roof, and you've seen that show up in the
00:42hardware trade. I think that's why you're seeing this crazy amount of volatility in the aftermarket,
00:47and it might require until we get the actual call and a little bit more granularity to get
00:51more comfort around exactly the trajectory from here. Yeah, good point. And I just want to just
00:56reiterate, too, for the guidance for the current quarter that we're in. And I'm just going to
01:00cite the cloud revenue numbers, which is what everyone's focused on. They are expected to grow
01:0457 percent. And yes, 57 percent is the number here. And I just want to just kind of draw your
01:13attention, Rishi, to just this general idea of just sort of the sustainability of some of the growth
01:18rates. The idea that this AI build out, at least if you believe certain folks on the street,
01:23is still in its relative infancy. Is Oracle, if that is true, is Oracle still the primary
01:29beneficiary of that long term? Yeah, look, I don't know if it's a necessarily primary
01:34beneficiary, but I would say definitely most levered to that, right? And especially to open AI in this
01:39case. And obviously, there's a lot of competition between them and Anthropic. But I think the view is
01:45that there's just more leverage. If we were to say how much incremental business from Oracle or OCI
01:51specifically is coming from AI, it's meaningfully higher than if you were to say that same percentage
01:56for Microsoft Azure or Amazon Web Services. And to a certain extent, Oracle has almost become,
02:02as a stock, a little bit of a proxy for that AI infrastructure and AI build out trade. So I
02:09think
02:09that's kind of the way that we would view that. Well, let's talk a little bit more about that,
02:14because, you know, I wonder how much concern you have around concentration risk. You think about
02:20the open AI relationship, open AI and Anthropic in a little bit of an arms race here. And I mean,
02:27how much of a concern is that for a company like Oracle, that customer concentration, that reliance?
02:34Yeah, it's a huge deal, right? And I think it hits its point in two ways. Number one is, well,
02:40you know, maybe open AI was viewed as the hands down leader, you know, when they first signed this deal.
02:45And, you know, obviously, the perceptions have shifted, you know, now open AI is making a big
02:49comeback with GPT 5.5 and Codex gaining share. But the viewpoint in the market is still, you know,
02:55Anthropic is ahead of them. Not my opinion, just saying what I what I'm hearing, at least from from
03:00the market. And then I think for Oracle, there is also the worry of like, what do the margins on
03:06this
03:06look like? If you're signing such a big deal with one customer, what sort of concessions, what sort of
03:11pricing? You know, if you think about all the hardware being put out here, are the incremental
03:15margins good enough? Or is this going to hurt what has been a very, very profitable company?
03:20Still a lot of unanswered questions here. Absolutely. Take a look at shares right now,
03:24down about 2% or so. We're also counting down to their conference call. And at this juncture,
03:31as you said, there's a lot of questions out there. What are you most interested to hear from
03:35management at this point? I think really two things. Number one is I really want to hear about
03:42kind of their diversification strategy for OCI, especially for AI infrastructure, as everyone is
03:48facing compute shortages and Oracle is in good place and obviously has GPU allocation. But then
03:55alongside that, I definitely want to hear about color around their CapEx. Right. We've seen the
03:59component price inflation. We've seen the fact that, you know, the top hyperscalers right now are
04:04spending the equivalent of the GDP of Sweden on hardware, and that's just in calendar year 26.
04:09And that number could inch higher. So I think, you know, it's a tough balancing act, but looking
04:14for both of those here. And I mean, they're saying basically they don't plan to issue any more debt in
04:18the current calendar year of 2026. But when we talk about the needs, and this really goes just beyond
04:25Oracle, but the financing needs to continue this build out, Rishi, I mean, what makes you comfortable
04:30as an analyst as to where that money comes from? The debt markets, equity markets, convertibles,
04:36cash off the balance sheet, where?
04:40Yeah, look, I think it's going to be a mix of all of the above, right? They have the debt,
04:44you know, looking at special vehicles. They have talked about equity issuance,
04:48and you've seen others in the space, hyperscalers, issue equity in order to pay for future CapEx.
04:55So I think it's going to be a mix of all of these maybe special purpose vehicles. I would also
04:59point
04:59out Oracle's trying to find efficiencies within the organization. They announced a pretty big
05:04layoff not too long ago, and I think that frees up capital. So really a combination of all of the
05:08above.
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