Why Eric Fry remains bullish on Oracle even after its price surge… Luke Lango’s notes from Day 3 of the All-In Summit… how to invest in XPU’s today
On Wednesday, Oracle Corp. (ORCL) surged 38% after the company announced blowout guidance. It was the tech company’s best single-day performance since 1992.
As we covered in the Digest, the company reported $455 billion of orders – up 359% from a year earlier. Analysts were expecting around $180 billion.
But while that eyepopping number got all the attention, Oracle’s quarterly earnings figures missed Wall Street expectations.
Is this a sign of the top?
Missed earnings with aggressive forward guidance echo Oracle’s dot com boom/bust when expectations of massive revenues never materialized, leaving Oracle’s inflated stock price with nowhere to go but down.
But maybe it’s not that extreme…
After all, Oracle doesn’t have to be on the edge of a crash to be a poor investment. An inflated valuation can mean a stock meanders sideways for years, returning 0%.
Here’s how our macro investor expert Eric Fry just described buying an overvalued stock:
Inhale.
Now, without exhaling, try breathing in again.
That second breath is what buying high-priced companies feels like to institutional investors.
These professional analysts have years of experience, and they know that inflated stocks will struggle to become even more inflated.
So, is buying – or just holding – Oracle a “lung-busting” decision today?
Eric recommended Oracle to his Investment Report subscribers almost one year ago to the day (they’re up 85% as I write Friday).
Here’s his quick post-surge commentary to his subscribers about what to do with Oracle:
Sudden price jumps of this size often accompany a ringing of the cash register.
After all, profits are always wonderful to lock in. (Besides, Oracle’s earnings results did include a slight revenue and earnings miss.)
But I recommend continuing to hold on to Oracle, as it has become no ordinary company.
Eric is focused on Oracle’s long-term earnings potential – which remains enormous
Earnings potential is part of what Eric focuses on when he looks for his next 1,000%-returning stock.
I write “next,” because he’s already dug up 41 of them (and countless triple-digit returning stocks) over his three-decade investment career.
As we’ve been highlighting this week in the Digest, Eric just released Apogee, his first ever quantitative stock-picking system. It’s engineered with the goal of identifying and quantifying the common traits, such as earnings potential and valuation, that characterize Eric’s 10-bagger recommendations.
For example, Eric wants a “just right” valuation – not overpriced, but not a distressed bargain either. The stock should be attractively undervalued and primed for growth.
And as to growth, Eric looks for a business that’s expanding at a healthy, sustainable pace, with steady revenue and profit gains – strong enough to drive a rally without risking burnout.
Eric’s original “buy” recommendation for Oracle had shades of both “fingerprints”:
[Investors might still be underestimating [Oracle’s] technological prowess and long-term earnings potential…
The company may be a legendary “old-timer” of the technology sector, but thanks to savvy, forward-looking strategic planning, it has become a dynamic AI play…
Because Oracle’s cloud infrastructure and its healthcare operations both provide comprehensive services to entire industries, the company should benefit from the overall growth of both AI and healthcare…
That makes Oracle an unequivocal “Buy.”
Even if we don’t know which LLM will come out ahead or which drugmaker will use GenAI to discover the next cure for cancer, it’s clear that Oracle will benefit.
For the remaining three 10X traits from Eric’s live presentation on Wednesday, you can watch the full replay for free right here.
You’ll also get the names of five brand-new stocks the system has flagged as potential 10X opportunities.
Circling back to Oracle, here’s Eric’s bottom line:
Selling Oracle today would be completely premature. That’s like selling Nvidia at $50 or Apple Inc. at $80.
We’re still in the early days of AI technologies, and demand for AI computing power will only rise from here. That gives Oracle even further room to run, and good reason for us to stay fully invested.
The stock is set to continue on its multi-year course of outsized gains.
What did Day 3 bring from the All-In Summit?
This week, our technology expert Luke Lango has been attending the All-In Summit in Los Angeles. It’s an exclusive, high-profile conference hosted by the four venture capitalist hosts of the popular All-In Podcast.
Luke has been reporting his insights and takeaways in his Innovation Investor Daily Notes.
Day One dove into uranium and the nuclear renaissance. Day Two shifted gears to robots and Physical AI, with Luke telling us, “The robots are here now, and any potential tech bubble is still a ways off.”
And then came the grand finale…
The final day featured a powerhouse lineup – Elon Musk of Tesla, Alex Karp of Palantir, and Eric Schmidt (former Google CEO), wrapping up the conference on a high note.
According to Luke, Musk doubled down on his vision that Tesla’s humanoid robot, Optimus, will be “the biggest product of all time.”
Musk also gave an update on Starlink, highlighting his ambition to turn Starlink into a single global carrier.
Schmidt had a more urgent message for attendees.
From Luke:
He hammered home the importance of SLMs (small language models) alongside LLMs.
His warning? China is currently ahead in edge AI inference — a space the U.S. can’t afford to lose.
He called for more resources toward SLMs and edge AI applications.
Luke reports that Schmidt also highlighted space as the “next big economy” (he’s a backer of Relativity Space). And he dove deep into AI’s growing role in modern warfare, particularly drones.
Let’s go to Luke’s bottom line from the entire conference:
Optimism in tech is alive and well.
AI is at the center of everything, with Physical AI (robots, drones) emerging as the next big frontier. Space is hot again. And tokenization is gaining traction.
The common denominator is this: our portfolios are anchored in exactly the right themes. We’re in the right place at the right time.
If you’re not one of Luke’s Innovation Investor subscribers and you’d like to join to find out what’s in those well-positioned portfolios, click here to learn more.
Some free AI names from Luke
Last Friday, shares of Broadcom (AVGO) soared after the company announced a new $10 billion customer, since revealed to be OpenAI.
But while the size of this deal is eye-catching, it isn’t the most significant detail.
From Luke:
[OpenAI] is ditching off-the-shelf GPUs and ordering custom-built AI chips (XPUs) instead.
That single disclosure marks the start of a tectonic shift in AI computing – away from Nvidia’s GPUs and into a new class of purpose-built accelerators.
This is a big deal.
For the last couple of years, Nvidia and its GPUs have ruled tech. But as AI grows smarter, the chips must change.
Back to Luke:
As AI models swell to trillions of parameters and tackle ever more specialized tasks, the blunt force of a general-purpose GPU won’t cut it.
The demand now is for chips as unique as the workloads themselves – and that’s why XPUs are set to take center stage.
XPUs are tailor-made accelerators designed for specific workloads. They also offer better performance per watt, lower costs, and tighter ecosystem lock-in than general-purpose GPUs.
Big Tech is betting heavily here, with Alphabet, Amazon, Microsoft, and possibly Apple all rolling out their own custom silicon chips.
For investors, this shift isn’t just a Broadcom story, there’s a wide circle of potential winners across the semiconductor value chain – and Luke just dropped the names.
As a starting point for your research, check out:
- Broadcom: the “other Nvidia,” with custom silicon and Ethernet dominance
- Marvell (MRVL): the smaller pure-play on custom chips and networking
- Cadence (CDNS) and Synopsys (SNPS): they sell the tools every new XPU needs
- Taiwan Semiconductor Manufacturing Company (TSM): the foundry of choice, plus Amkor (AMKR) and ASE (ASX) in advanced packaging
- Arista (ANET): a leader in Ethernet switching, alongside optical suppliers Coherent (COHR), Lumentum (LITE), and Fabrinet (FN)
- ASML (ASML), Applied Materials (AMAT), Lam Research (LRCX), and KLA (KLAC): equipment makers
- GOOGL, META, MSFT, AMZN, AAPL: the hyperscalers themselves
(Disclaimer: I own SNPS, COHR, LITE, ASML, GOOGL, MSFT, AMZN, and AAPL)
Here’s Luke’s bottom line:
GPUs aren’t going away – but we believe the days of the AI market being a one-horse race are numbered.
With hyperscalers leaning in to custom-built chips, tens of billions of dollars are about to shift into new hands across the semiconductor value chain.
The smart money will follow that flow.
Wrapping up…
Lots of potential investments for you in today’s Digest.
Eric believes Oracle’s returns are just getting started (and there’s reason to believe it could be his next 10X winner) …
Broadcom is poised to be one of tomorrow’s biggest AI leaders as enormous revenues roll in…
And the entire XPU semiconductor value chain has brisk tailwinds at its back…
We’ll keep tracking these stories here in the Digest. In the meantime, invest accordingly.
Have a good evening,
Jeff Remsburg
