ORCLOracleBearishOracle

Yesterday on

The bond market told you to get out of Oracle 11 months ago. Last December, Oracle's stock had already given back its entire AI pop, and the cost of insuring its debt was climbing because it needed to borrow $38B for its data centers. That's when we shorted it at $189.97. Since then the stock is down 39%, and the cost of insuring Oracle's debt has more than doubled. In July, S&P cut Oracle to one notch above JUNK. Watch the CDS, the price of insuring a company's debt against default, because the bond market figures it out before the stock market does.

BearishORCLOracleOracleCRWVCoreWeave, Inc.CoreWeave, Inc.

3d ago on

AI can be great technology, and the AI stocks can still be a disaster. The internet changed the way we live, and you still got destroyed buying the dot-com stocks in 2000. A great product and a great investment are two different things, and the only question that matters is: Show me the money. That was my warning back in February, and the AI crowd STILL can't answer it. Since then, OpenAI has watched investors cut its funding round by a third, and the stocks are paying the price, with CoreWeave down 57% and Oracle down 39% from where we shorted them. You can't expect to make money on "trust me bro."

BearishORCLOracleOracleALABAstera LabsAstera LabsCRWVCoreWeave, Inc.CoreWeave, Inc.

3d ago on

THIS AGED LIKE FINE WINE My advice in February was simple: run from tech into energy, and treat the AI stocks like the dot-com stocks of 2000. Since that interview, our AI shorts have been crushed. CoreWeave is down 57%, Astera Labs is down 56% and Oracle is down 39% from where we shorted them. On the other side of the book, Valaris is up 48% and Cenovus is up 61% from where we called them in December. The internet changed the world and the dot-com stocks still crashed. AI is running the same play, and the crowd buying every dip is learning that the hard way. Which side do you want to be on? For the AI stocks, it will only get WORSE from here.

BearishORCLOracleOracleCRWVCoreWeave, Inc.CoreWeave, Inc.

1w ago on

Whoever wins tonight, the AI trade still loses. Everyone's quoting the stat that stocks always rally after the midterms and that November is the strongest month of the year. I think that's NONSENSE. The election doesn't solve the AI funding problem. There's still no demonstrable return that justifies the trillions being spent on capex, and I'll happily change my mind the day someone shows me the numbers. The momentum crowd has been getting destroyed since the summer, and hedge funds dumped tech last month at the fastest pace in a decade. A manager who's behind in February has all year to make it back, while one who's behind in November has a few weeks, so they won't add risk into a falling market, and weakness brings more weakness. We're short the neoclouds and Oracle, and our CoreWeave short is down 53% from where we called it. A relief bounce wouldn't surprise me, but this is an investment and I'm staying short. This is a time to be on guard. When there's no fat pitch to swing at, cash pays you to wait. Are you listening?

BearishORCLOracleOracleCRWVCoreWeave, Inc.CoreWeave, Inc.QQQNasdaqNasdaq

1w ago on

Sam Altman just ran out of buyers at his price, and the AI bubble is GAME OVER. The money that carried this entire boom is pulling back, and the tech bros buying this dip are about to learn what every homebuyer learned in 2006. Watch this TERRIFIC video from @JayMartinBC comparing AI to the housing bubble. His point is that the housing bust really started in 2006, while prices were still at record highs, because borrowers paid off their old loans by refinancing against a higher price. When the gains shrank from the mid-teens to single digits, the refinancing stopped working and the loans started going bad. OpenAI runs on the same engine. It loses billions every year and pays yesterday's bills by raising money at a higher price, so the only number that matters is how much higher each new price comes in. Every time OpenAI has been priced since early 2024, the new mark came in 67% to 91% above the one before it. This month they went out to raise $30B at $1.4T, a 64% markup, and investors pushed back on the price, so it came down to $1.25T. Then on Friday we learned some of them cut what they were willing to put in, so the round shrank by a third to about $20B, and the first close is expected to come in below even that. One person familiar with the round said every earlier raise was a frenzy and this one landed with a thud. The markup just fell to 47% with a third less money behind it. The valuation is still going up while the speed is breaking, and that's how housing looked in 2006. What worries me most is who they go after next: OpenAI first pitched $1.4T to private wealth clients, and even they pushed back. Now the reports say the gap could be filled later with another offering to wealthy individuals at $1.25T. In 45 years I've watched the individual investor end up as the last buyer in every bubble, and that's who they're coming for now. OpenAI is also the customer at the end of the entire AI chain. Oracle's backlog leans on a $300B OpenAI contract and CoreWeave has up to $22.4B, and both borrowed heavily to build for it. When the end buyer struggles to raise money, the suppliers who borrowed against its promises feel it first. And the collateral is WORSE this time. A house in 2006 was still a house 10 years later, but the chips inside these data centers are outdated in about 3 years while the debt used to buy them runs far longer. The market is already pricing it. On Friday the Nasdaq 100 fell 3.5% for its worst day since June, and the chip index dropped 7.2%. This is why we shorted CoreWeave at $107 and Oracle at $189.97, and why we pressed the CoreWeave short at $81.58 earlier this month. CoreWeave is now down 49% from our entry and Oracle is down 31%. All 12 of our scored shorts are winners, and our long/short spread is 70%. And don't buy this dip. I'd trim anything that depends on OpenAI paying its bills, and I'd own gold and businesses that generate real cash today. If you want the names I'm investing in, join The Noble Update. IT'S GAME OVER Are you listening? https://t.co/p38GgcCjci