To The Moon

$Oracle(ORCL)$ $NVIDIA(NVDA)$ $Advanced Micro Devices(AMD)$ 🚨🔥💻 Oracle’s GPU Rentals Exposed: Thin Margins, Big Questions, and a $1 Trillion AI Bet 💻🔥🚨

I’m watching $ORCL sink fast, down more than 7% intraday, after The Information dropped a bombshell report on Oracle’s AI cloud margins. Oracle generated $900M in Nvidia-powered cloud revenue but earned only $125M in gross profit. Some GPU rentals were reportedly loss-making. This isn’t just a dip; it’s a sharp repricing of how the market views Oracle’s role in the AI infrastructure boom.

📉 Market Reaction

Oracle shares cratered from $291.59 to $274.89 (-5.72%) in a matter of hours after the report. Intraday price action showed a vertical drop as traders digested the news of $100M in losses from Blackwell chip rentals last quarter. Technically, the stock has broken through multiple 4H EMA and Keltner channels, with price now pressing against the lower Bollinger band. Support sits around $270, and if that fails, $258 becomes the next key level.

💰 Thin Margins, Not Weak Demand

This isn’t about lack of buyers. Internal Oracle data revealed GPU rental gross profit margins averaged just 16% over the past year. That’s razor-thin for an infrastructure-heavy business. It suggests hyperscalers and AI startups are negotiating hard, or they’ll simply switch to cheaper capacity from players like $IREN, $NBIS, or $CRWV. Oracle may be winning business, but at what cost?

🧠 The OpenAI Factor: $1 Trillion in Compute Commitments

Financial Times reports that OpenAI has locked in roughly $1 trillion worth of compute deals this year across $NVDA, $AMD, $ORCL, and $CRWV, spanning more than 20GW of AI capacity over the next decade. That’s equivalent to 20 nuclear reactors worth of power. Estimated commitments:

• $500B to Nvidia

• $300B to AMD

• $300B to Oracle

• $22B+ disclosed to CoreWeave

👉 That raises a bigger strategic question: where is all this capital coming from? Gil Luria of DA Davidson noted OpenAI is burning through cash with no clear ability to finance these massive deals, estimating losses of $10B this year alone.

🧭 Strategic Implications

Oracle’s AI strategy hinged on renting out Nvidia GPUs to capture the explosive demand wave. But these new numbers expose a fragile margin structure. If pricing pressure persists while capital expenditure soars, Oracle could end up being the utility provider of the AI era—bearing the infrastructure cost but capturing limited upside. Meanwhile, Nvidia captures chip economics, and AI companies capture application-layer value.

👉❓Is this the first crack in the AI infrastructure margin story, or just a temporary growing pain for Oracle’s cloud ambitions?

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