06/11 Oracle earnings release, Iran issue

After hours, the U.S. stock market fell by around 0.5%. International oil prices are also rising by 2%, and gold is falling to the early $4,000. This is estimated to be the result of Oracle performance and the U.S.-Iran military conflict. As today is the expiration date of Korean market futures options, caution should be taken as the volatility of intraday increases in Iran-related content.

Oracle Earnings Release and Conference Call Final Analysis
Oracle Corp.’s performance exceeded expectations and its remaining performance obligation (RPO) reached a whopping 638 billion dollars. This is about 9.5 times the annual revenue. The management pointed to explosive demand for agent-type coding, not chatbots, as the surest practical example of AI demand, arguing that competition to expand infrastructure is still in its infancy. Oracle Corp., which used to be centered on databases and SaaS through large-scale capital expenditures, has now transformed itself into a company that competes head-on with the cloud sector of big tech companies.

Despite these results, it is down more than 9% after-hours. The market focused more on the investment burden than on the performance. Oracle suggests a net cash-based capital expenditure (CapEx) of about $70 billion for fiscal year 2027. To this end, it announced a plan to raise funds through the issuance of debt and stocks worth about $40 billion. It also mentioned that a drop in gross profit margin is expected in the short term due to the expansion of data centers and increased depreciation. In other words, concerns about AI demand itself have been greatly eased, but the need for more capital than expected to secure AI competitiveness has been highlighted, and investors are falling as they pay attention to worsening cash flows and diluting shareholder value in the future.

the U.S.-Iranian skirmish
U.S.-Iranian direct talks failed to take place despite Qatar’s mediation after the U.S. stock market closed. Iran’s ambassador to the U.N. also mentioned that a sustainable agreement is not possible due to U.S. threats through force. Meanwhile, there were reports that Trump is considering launching a large-scale short-term operation against Iran, and U.S. Defense Secretary Hegseth said that the Central Command will be very busy tonight. In fact, the Central Command announced that it has launched additional attacks on multiple targets across Iran.

Iran’s attacks on U.S. ships, explosions on Iranian port facilities, and Iran announced that it would eventually shut down all shipping traffic in the Strait of Hormuz. The move was made in a hurry, with reports suggesting that two vessels that were actually passing through the Strait of Hormuz had been hit.