Oracle (ORCL) is a high-conviction investment in the AI infrastructure theme, as its massive $455 billion order backlog signals explosive future revenue that overshadows minor current earnings misses. For a speculative play on falling interest rates, consider "Buy Now, Pay Later" company Klarna (KLARNA), whose profitability improves as its cost of funding decreases. Investors should avoid recent IPO Chime (CHIME) due to its unprofitability and operation in a highly competitive, low-margin banking space. Be cautious with hyped IPOs driven by social media, as seen with the extreme volatility in Figma and Gain 8co (ORBS), which often correct sharply. While CoreWeave shows tremendous revenue growth in the AI data center space, it remains a speculative investment due to its high valuation, lack of earnings, and operational risks.

Oracle (ORCL)

• The company reported earnings that initially seemed like a miss:
  • Earnings Per Share (EPS): $1.47 vs. an expected $1.48.
  • Revenue: $14.93 billion vs. an expected $15.04 billion.
• Despite the misses, the company announced its Remaining Performance Obligations (deferred revenue + backlog) exploded to $455 billion, up 359% year-over-year, due to mega-contracts with AI-related companies.
• This backlog is tied to its cloud infrastructure business.
• Oracle provided a very specific five-year revenue forecast for its infrastructure business:
  • Fiscal 2026: $18 billion
  • Fiscal 2027: $32 billion
  • Fiscal 2028: $73 billion
  • Fiscal 2029: $114 billion
  • Fiscal 2030: $144 billion (up from $10 billion in fiscal 2025)
• The stock was up 38% the morning after the report and is now up almost 80% for the year.
• The speaker notes that Oracle has now joined NVIDIA in the "exclusive club" of AI-related companies putting out "shocking numbers."

Takeaways

• Oracle is successfully riding the AI wave, transforming from a company with a history of disappointing investors to a major player in AI infrastructure.
• The massive growth in its order backlog suggests very strong future revenue, which the market is valuing more than the slight miss on current quarterly earnings.
• Investors should look beyond headline EPS and revenue numbers to metrics like backlog and future guidance, especially for companies in the AI sector.

IPO Market Analysis

• The speaker notes the IPO market is "hot" and that retail investors and social media are now crucial drivers of an IPO's success, a shift from when institutional buyers were the primary focus.
• Many recent IPOs are being driven to "crazy levels" by social media hype before settling down.
• The speaker distinguishes between IPOs that are "real companies" and those that are "more questionable."
• The overall market is not yet in a bubble, especially given that the strong numbers from companies like Oracle are real.

Takeaways

• When evaluating a new IPO, it's important to determine if the price movement is based on the company's fundamental business or on social media hype.
• Retail investors should be cautious of "hot" IPOs that experience massive price jumps right after listing, as these are often volatile and can correct sharply.
• The speaker suggests a change in market perception: the assumption is now that a new company is the "next big thing" until proven otherwise, which can lead to inflated valuations.

CoreWeave

• CoreWeave manages data centers, operating in the buildings that REITs like Equinix and Digital Realty build.
• It's a large company with a $55 billion market cap.
• Financials:
  • Q2 Revenue: $1.2 billion (up 200%)
  • Revenue Backlog: $30 billion (up 86%)
  • The company has no earnings yet.
  • The 2027 Price-to-Earnings (P/E) ratio is estimated at 55x, which is considered "very high, but not totally insane."
• IPO Performance: Went public in late March at $40 per share, soared to $180 in June, and is now around $112.
• Risk Factor: This is not a cheap business to operate. CoreWeave incurs high upfront costs to build and carry new data centers, which is why it did not raise its operating profit guidance despite strong revenue growth.

Takeaways

• CoreWeave is a "great story" in the hot AI data center space with huge revenue growth. The strong demand reported by Oracle is seen as great news for CoreWeave.
• The stock is prone to "wild, emotional swings" because valuing the company is difficult without current earnings, making it a speculative investment.
• An example of this volatility: the stock jumped 7% on news it was creating a fund to invest in AR startups, an activity that is not its core business but sounds exciting to the market.

Chime (CHIME)

• Chime is a "neo-bank" focused on providing banking services to the underbanked via technology.
• Market cap is $8.8 billion.
• IPO Performance: Went public in June at $27 and is now trading below its IPO price at $23.
• The speaker expresses a bearish sentiment, noting it operates in a "very tough space" with many players and low barriers to entry.
• The company is not profitable.

Takeaways

• The speaker categorizes Chime as one of the "more questionable" recent IPOs.
• Its poor stock performance since the IPO and the competitive, low-margin nature of its business suggest significant headwinds.

Bullish

• This company operates a cryptocurrency exchange for institutional investors, similar to how Coinbase serves retail investors.
• Market cap is almost $8 billion.
• IPO Performance: Went public on August 13th at $30, jumped to $75, and is now around $54. The performance is described as "a bit better, but not what I would call totally stellar."

Takeaways

• There could be a "real business here," but it is in a very early stage.
• Key uncertainties for investors are the level of future competition and whether the business has high barriers to entry.

Circle

• Circle is a $30 billion market cap company that creates stablecoins, which are digital currencies backed by assets like short-term U.S. treasuries to maintain a stable value (e.g., $1).
• Its revenue is the interest earned on the U.S. treasuries it holds to back the stablecoins.
• IPO Performance: Went public at $31 in June, saw a secondary offering at $130 in August, and is currently trading around $130. The stock had a wild ride, going from $31 to $263 before correcting.
• Valuation is considered "very extreme" with a P/E ratio over 90x based on 2026 consensus estimates.
• Risk Factor: The company's revenue is highly dependent on short-term interest rates. If the Fed lowers rates by 1% (100 basis points), it could cut Circle's revenue by a double-digit percentage.
• Risk Factor: The speaker questions the barriers to entry, suggesting any large financial institution could enter this space.

Takeaways

• Circle is considered a "real business" in the "hot space" of stablecoins, which are expected to play a role in global payments.
• Investors should be aware that this is not a typical tech company; its financial performance is directly tied to interest rate movements. When rates are expected to fall, Circle's revenue and stock may underperform.
• The extremely high valuation combined with interest rate risk and potential competition makes this a speculative investment.

Klarna (KLARNA)

• Klarna is a "Buy Now, Pay Later" (BNPL) company, competing with Affirm (AFRM) and PayPal.
• IPO Performance: Went public this week at $40, closing its first day at $45.82 ("not bad, but not really great"). It has since fallen to around $42.
• The IPO valued the company at $15 billion, a significant drop from its peak private valuation of $45 billion.
• The company is not yet profitable but is expected to be soon.
• Risk Factor: Like Circle, its business is highly sensitive to short-term interest rates, but in the opposite way. Klarna makes zero-interest loans and pays to fund them, so when rates go down, its costs decrease and profits improve.
• Risk Factor: The credit quality of its loans has not been tested by a major recession. The speaker predicts investors will sell BNPL stocks if recession fears rise.

Takeaways

• Klarna is a "real company" in a fast-growing niche, but the speaker doubts it will replace credit cards.
• Because its earnings are so sensitive to interest rates, the speaker argues it does not deserve a high-tech valuation multiple.
• Investors should understand the inverse relationship between BNPL stocks (like Klarna and Affirm) and interest-earning stablecoin companies (like Circle). When rates are expected to fall, Klarna should perform better than Circle, all else being equal.

Figma

• Figma is a browser-based design tool that uses AI for creating user interfaces for websites and mobile apps.
• The speaker calls it a "real company," validated by the fact that Adobe tried to acquire it.
• Market cap is $26 billion.
• IPO Performance: Went public at $33, shot up to $120 in two days, and is now at $54.
• Valuation is described as "nosebleed" with a P/E ratio of 230x the 2026 consensus estimate.
• The stock recently declined 20% in one day after it reported revenue guidance that was merely "in line" with expectations.

Takeaways

• Figma is a legitimate company in a hot software sector.
• The extremely high valuation creates immense pressure. The stock can fall sharply even if the company performs well but fails to dramatically exceed expectations.
• This is an example of a high-growth, high-risk investment where any perceived misstep will be punished severely by the market.

Gain 8co (ORBS)

• A small-cap stock ($2.8 billion market cap) flagged as an example of the "incredible power of retail social media."
• The stock closed at $1.45 on a Friday. On the following Monday, it announced it was raising money to buy the cryptocurrency WorldCoin as its primary treasury asset.
• On this news, the stock closed at $45 (a 3,000% increase) after hitting a high of $80.
• The speaker is certain this was "all retail" speculative fever, not institutional buying, and compares it to the GameStop phenomenon.
• The stock has since declined to below $20.

Takeaways

• This is a cautionary tale about pure speculation driven by social media hype.
• Such extreme moves are not based on fundamentals and are highly likely to reverse, leading to massive losses for those who buy at the peak. This is not investing, but gambling on momentum.