# Oracle Falls Most in Six Months on Mounting Data Center Costs

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 11 Jun 2026, 15 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/e89fd020-b328-4fff-8f2b-b466011b645d/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu -Anurag Rana, Bloomberg Intelligence Technology Analyst, recaps Oracle earnings. Oracle Corp. shares declined after the company reported quarterly capital expenses that were higher than estimates, raising investor concerns about the profitability of the AI infrastructure business. -George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense, & Airlines Analyst, discusses SpaceX’s IPO. Retail investors bidding for shares in SpaceX’s initial public offering have submitted more than $100 billion in orders, according to people familiar with the matter, as the potentially record-breaking debut enters the home stretch. -Lily Meier, Bloomberg Retail Reporter, discusses the Bloomberg Big Take story: “Nike’s Savior CEO Is Grappling With a 45% Stock Slump.” Nike CEO Elliott Hill, a longtime company veteran, came out of retirement with much fanfare to right a sinking ship. Over a year in, not much is working – sales and shares are down and new products aren’t resonating. Competitors, meanwhile, are gaining traction among consumers, pushing Nike deeper into a hole with trying stay relevant. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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[0:24] Speaker 2: I thought the story for tech companies, if you spend capex,
[0:27] Speaker 2: that's a good thing.
[0:29] Speaker 3: Once upon a time it was.
[0:30] Speaker 4: Yeah, I don't know, but I guess things have changed
[0:32] Speaker 4: a little bit.
[0:33] Speaker 2: Oracle.
[0:34] Speaker 3: Oracle Corp.
[0:35] Speaker 2: Shares declined in pre market trading after the company reported
[0:37] Speaker 2: quarterly capital expenses that were higher than estimates.
[0:40] Speaker 4: And it's boom. It's trading down down ten point nine
[0:44] Speaker 4: percent here today. I mean, this is a big company.
[0:46] Speaker 2: It's got a half a trillion dollar market cap, so
[0:49] Speaker 2: I mean we're talking some real money here. Anorak Rana,
[0:51] Speaker 2: he can explain this to us. He's a technology channels
[0:53] Speaker 2: for Bloomberg Intelligence, Honor. What's going on with Oracle today?
[0:56] Speaker 2: What did the market not like?
[1:00] Speaker 5: I think one of the things you have to think
[1:01] Speaker 5: about it is there is an unlimited capital in the world. Frankly,
[1:04] Speaker 5: I know everybody is funding data centers, but one of
[1:07] Speaker 5: the things Oracle is also doing is when it's going
[1:10] Speaker 5: to raise capital next year or even this year, it's
[1:13] Speaker 5: going to do some equity offering and it's going to
[1:15] Speaker 5: do some debt offering. So it looks like next year
[1:18] Speaker 5: there's going to be more equity dialution by raising by
[1:21] Speaker 5: them raising at least twenty billion dollars, it's going to
[1:24] Speaker 5: be most likely more than that. And I think that
[1:26] Speaker 5: is something that everybody needs to grapple with because we
[1:30] Speaker 5: understand there is in finite demand, but we don't know
[1:33] Speaker 5: if there's infinite demand for capital. Also, at this point, it.
[1:37] Speaker 2: Kind of goes to what I was thinking when we
[1:39] Speaker 2: hired Rob Schiffman years ago, who's one of the top
[1:42] Speaker 2: tech credit analysts.
[1:44] Speaker 4: I'm like, what are we hiring a tech credit analysts?
[1:46] Speaker 4: They don't issue any debt? Was IRA in the market concreation?
[1:50] Speaker 6: Yeah, And now in many ways even credit investors are
[1:54] Speaker 6: overexposed to tech debt. So when it comes to Oracle
[1:57] Speaker 6: needing more capital, how are these I don't know how
[2:01] Speaker 6: are How is the fundamental performance going to affect how
[2:05] Speaker 6: it and when it seeks that capital, whether it's equity,
[2:08] Speaker 6: whether it's dead.
[2:10] Speaker 5: So they have raised debt this year, they're saying they're
[2:13] Speaker 5: not going to do any more debt rays in twenty
[2:15] Speaker 5: twenty six it's going to be most likely and next
[2:18] Speaker 5: year affair. But you know, remember one thing in this case,
[2:21] Speaker 5: they have said that they will maintain good credit quality
[2:24] Speaker 5: out there, so they have to be very cautious about that.
[2:27] Speaker 5: So Oracle is a name it has backing off, you
[2:30] Speaker 5: know obviously not not just Larry Allison, but also a
[2:33] Speaker 5: very strong, fundamentally cash rich software business, and I think
[2:38] Speaker 5: that helps out. But to be very frank, the numbers
[2:41] Speaker 5: we're talking about is no longer you know, ten to
[2:43] Speaker 5: fifteen billion in capex. We are talking about seventy billion
[2:47] Speaker 5: in north of that. So this is a you know,
[2:49] Speaker 5: the kapex numbers just keep on getting bigger and bigger.
[2:52] Speaker 2: And you know, your industry technology software in particular HOURCK
[2:57] Speaker 2: has historically been characterized by amounts of free cash flow.
[3:01] Speaker 2: That's no longer the case here. How long is is
[3:04] Speaker 2: that going to be the case for your world?
[3:07] Speaker 5: So the one part is this has been bifocated into
[3:10] Speaker 5: two different groups within software. One is that's dedicated to
[3:14] Speaker 5: AI infrastructure, so that's Oracle Cloud Infrastructure, Cold Weave and
[3:18] Speaker 5: Nevius and those guys. The other companies which are Salesforce
[3:22] Speaker 5: and Adobe and those they are still pure software. Their
[3:27] Speaker 5: caplex is not going at that same rate, but they
[3:30] Speaker 5: have a different risk, which is getting disrupted by AI.
[3:33] Speaker 5: On one hand, the other group is benefiting from AI
[3:37] Speaker 5: build up. The other one is under threat. So there
[3:39] Speaker 5: are three or four dimensions that you have to play
[3:42] Speaker 5: with right now. It's no longer an easy case that
[3:45] Speaker 5: just buy the software names and you know it'll just
[3:47] Speaker 5: going to go up.
[3:48] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[3:55] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[3:59] Speaker 1: weekday the ten astern on Applecarplay and Android Auto with
[4:02] Speaker 1: the Bloomberg Business app. Listen on demand wherever you get
[4:05] Speaker 1: your podcasts, or watch us live on YouTube.
[4:09] Speaker 2: SpaceX ipo pricing after the close tonight, ready to trade tomorrow.
[4:14] Speaker 2: Lots of the headlines crossing the tape. SpaceX ipo said
[4:18] Speaker 2: to draw more than seventy billion dollars in retail orders,
[4:21] Speaker 2: and remember SpaceX said that it was going to allocate
[4:23] Speaker 2: at least twenty percent of its IPO to retail investors.
[4:27] Speaker 2: And also seeing a headline, SpaceX said to allocate less
[4:29] Speaker 2: than ten percent of IPO.
[4:31] Speaker 4: To international orders. That's a little bit unusual here.
[4:33] Speaker 2: So we'll get to see price tonight and get a
[4:35] Speaker 2: trading tomorrow, and that should be will be the largest
[4:38] Speaker 2: IPO of all time by far. George Ferguson, he's a
[4:41] Speaker 2: senior aerospace, defense and airlines analysts.
[4:44] Speaker 4: For Bloomberg Intelligence. He's been writing.
[4:46] Speaker 2: Research on SpaceX on.
[4:48] Speaker 4: The Bloomberg terminal.
[4:49] Speaker 2: So if you want to get full research on this
[4:51] Speaker 2: company this transaction, go to Bigo on the terminal and
[4:54] Speaker 2: that's where you'll find it. And George's been the analyst
[4:56] Speaker 2: on that. George, what are you hearing here as we
[4:59] Speaker 2: approach the end of this road show? What have you
[5:01] Speaker 2: been hearing back from clients? How they're maybe just looking
[5:04] Speaker 2: at this company, positioning this company because there's a lot
[5:07] Speaker 2: going on here.
[5:08] Speaker 7: There is a lot going on, and so I think
[5:11] Speaker 7: what we're hearing from folks is that there's still I
[5:15] Speaker 7: think a bit of a dearth of information. You know,
[5:19] Speaker 7: people are looking for I think decent models on the
[5:22] Speaker 7: near term to get their arms around it. I think,
[5:25] Speaker 7: you know, the challenge here is really this is a
[5:28] Speaker 7: long term play on AI and XAI specifically, and I
[5:34] Speaker 7: think you know, when you're all done, I think you
[5:37] Speaker 7: I don't know, if you close your eyes and sign
[5:40] Speaker 7: on the dotted line or whatever, you go on a
[5:42] Speaker 7: trip of the elon Musk for AI and connectivity into space.
[5:48] Speaker 2: Yeah, I'm just looking at the FA function and there's
[5:50] Speaker 2: some analyst consensus numbers out there. So just count to
[5:54] Speaker 2: your twenty five about nineteen billion of revenue. Count to
[5:56] Speaker 2: your twenty six to forecast is for close to thirty
[5:59] Speaker 2: billion calendar twenty seven, forty eight billion on calendar twenty eight,
[6:04] Speaker 2: sixty three billions, So some serious revenue growth there.
[6:09] Speaker 4: Howard investors kind.
[6:10] Speaker 2: Of valuing this thing, is this a multiple of revenue
[6:13] Speaker 2: because there's you know, not a lot of earnings yet.
[6:16] Speaker 7: So for you know, for all the businesses at Bloomberg Intelligence,
[6:21] Speaker 7: we undertook our analysis based on some of the parts,
[6:25] Speaker 7: and every single one of the businesses was valued based
[6:28] Speaker 7: on revenue. Right, So I based a launch on revenue,
[6:33] Speaker 7: and I used rocket Lab as it's nearest peer. Multiples
[6:37] Speaker 7: there at rocket Lab or seventy times revenue. I mean, wow,
[6:40] Speaker 7: that's no pun intended. That's astronomical to what I'm used
[6:44] Speaker 7: to in the in the aerospace world. John Butler did
[6:49] Speaker 7: it on the on the connectivity piece. He's again using revenue.
[6:53] Speaker 7: Although that's one business where they're going to make some profit.
[6:57] Speaker 7: I think, you know, we're going to put out a
[6:59] Speaker 7: model next week. I think John's looking at sort of
[7:03] Speaker 7: four billion kind of profit out of that business. But
[7:06] Speaker 7: then the AI business is the sort of the big
[7:09] Speaker 7: sucking sound in the middle of this, and that's going
[7:11] Speaker 7: to be I think a loss for the year, a
[7:13] Speaker 7: big loss. I think it's something like eight billion. Man
[7:16] Speaker 7: Deep Singh leading the charge on that side of it. Again,
[7:20] Speaker 7: valued it on revenue. Look, we don't think it's going
[7:22] Speaker 7: to be profitable for at least the next couple of years.
[7:25] Speaker 7: The question is how far out you want to take
[7:28] Speaker 7: your model. I think again, the AI business will be
[7:31] Speaker 7: heavy in the investment phase, and so you're just not
[7:34] Speaker 7: going to see profitability in that business. I think your
[7:37] Speaker 7: connectivity business, you know, you will see profitability out of
[7:41] Speaker 7: that business. But that's a little bit of a you know,
[7:44] Speaker 7: you're it's competition with terrestrial providers. The product is valuable,
[7:50] Speaker 7: but it's got more latency again than the terrestrial providers.
[7:56] Speaker 7: So it's a growth business. But not a exponentially growth
[8:00] Speaker 7: owing kind of business, and the launch business is a
[8:02] Speaker 7: bit flatish. So I think it's really all about how
[8:06] Speaker 7: you think about AI long term investment in data centers
[8:10] Speaker 7: and getting into space. The launch business is really about
[8:13] Speaker 7: lifting it into space as cheaply as possible, and that's starship.
[8:17] Speaker 2: Now they're gonna be raising seventy five a billion dollars
[8:20] Speaker 2: at the price in this IPO. I got a sense
[8:25] Speaker 2: just thinking about these businesses Georgie and looking at their
[8:28] Speaker 2: capital needs, that they're going to need more money. How
[8:30] Speaker 2: do they expect the finance their growth going forward? Is
[8:32] Speaker 2: this more equity?
[8:33] Speaker 3: Is it debt?
[8:34] Speaker 4: What do we know?
[8:36] Speaker 5: Yeah?
[8:36] Speaker 7: My guess is that you're going to have to see
[8:38] Speaker 7: more equity because again you're inside businesses that aren't really
[8:41] Speaker 7: generating well, not even aren't really aren't generating sufficient cash
[8:46] Speaker 7: for investment. So I feel like they're going to have
[8:48] Speaker 7: to come back to the equity markets. You could try
[8:50] Speaker 7: to pile a bunch of debt in it, there's not
[8:52] Speaker 7: much in there right now, not sure how you'd support it, right,
[8:55] Speaker 7: So I think I feel like you're going to be
[8:57] Speaker 7: back for that, right, So, I think some of these
[8:59] Speaker 7: AI busines. This is a little bit out of my space, right, man,
[9:02] Speaker 7: deep does it more? I think it's all about look
[9:05] Speaker 7: at what you need now to keep your investment going
[9:08] Speaker 7: to strut to try to stay in the lead on AI,
[9:13] Speaker 7: and then figure out your financing as you go. Right,
[9:16] Speaker 7: you can't look too far down the road. These are
[9:18] Speaker 7: big numbers, I.
[9:19] Speaker 2: Think, so before we let you go, George, I mean,
[9:23] Speaker 2: it really comes down to Elon and AI. If you
[9:25] Speaker 2: believe in both of them, you kind of close your
[9:28] Speaker 2: eyes and jump in.
[9:29] Speaker 7: I think that's exactly it, right. The valuation again, is
[9:32] Speaker 7: much larger than what I'm used to dealing with an
[9:34] Speaker 7: aerospace defense. It's a very large valuation. Elon's going to
[9:38] Speaker 7: have the majority of the B shares, which are a
[9:41] Speaker 7: ten vote compared to one vote for the A shares.
[9:44] Speaker 5: Yep.
[9:45] Speaker 7: I think you're going on a trip with Elon. You
[9:47] Speaker 7: got to believe in his vision for the future. If
[9:49] Speaker 7: you're going to step into this and you're not looking
[9:51] Speaker 7: at evaluations intensely.
[9:55] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[10:01] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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[10:06] Speaker 3: He's done on.
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[10:10] Speaker 1: Listen on demand wherever you get your podcasts, or watch
[10:13] Speaker 1: us live on YouTube.
[10:15] Speaker 4: Nike tough times there.
[10:17] Speaker 2: I mean, you think about Nike is the trailblazer for
[10:21] Speaker 2: ath leisure type in this country, and of course the
[10:24] Speaker 2: shoes and the Jordan's and all that, But the stock's
[10:25] Speaker 2: having a problem.
[10:26] Speaker 4: The company's having a problem.
[10:27] Speaker 2: So let's break it down with Lily Meyer, Bloomberg retail reporter,
[10:31] Speaker 2: talk to us about Nike yet.
[10:32] Speaker 4: I know when new CEO came in, but he's not
[10:35] Speaker 4: been able to work magic yet. What's going on with Nike.
[10:38] Speaker 8: Yeah, so when the new CEO, Elliott Hill, came in,
[10:41] Speaker 8: everyone was static, you know, the stock shot up and
[10:45] Speaker 8: then internally people were popping bottles for Saco. They made
[10:50] Speaker 8: a mocked up meme of the Obama Hope poster with
[10:54] Speaker 8: Hill's face on it. But while he's been in the rule,
[10:57] Speaker 8: the stock is down now forty five percent, and he's
[11:01] Speaker 8: really focused on getting the company back to sport and
[11:04] Speaker 8: that's been a big struggle.
[11:06] Speaker 6: What is his bigger challenge getting Nike back on track
[11:10] Speaker 6: in North America or getting Nike back on track in China, because.
[11:13] Speaker 3: Both of these are huge.
[11:14] Speaker 6: I mean, the US is the whole market, but China
[11:16] Speaker 6: was where the growth was really happening.
[11:18] Speaker 8: Yeah, so in North America things are getting better, but
[11:21] Speaker 8: I would say greater China still remains one of the
[11:23] Speaker 8: bigger challenges. And I think, you know, more broadly, showing
[11:27] Speaker 8: up at big sports moments has been a challenge for Hill,
[11:30] Speaker 8: which is what the story gets into.
[11:33] Speaker 3: Explain what you mean by that.
[11:34] Speaker 8: Yeah, So for example, the World Cup, you know, is
[11:39] Speaker 8: about to kick off, and first Nike's World Cup jerseys
[11:44] Speaker 8: had this design flaw. So if you look at them,
[11:47] Speaker 8: the shoulder puckers up and that's for both players and
[11:51] Speaker 8: in fan jerseys and people you know immediately saw that,
[11:54] Speaker 8: and then the jerseys. There's also been struggles to get
[11:58] Speaker 8: them to retailers on time as well.
[12:01] Speaker 2: You know, how important is having the player endorsement as
[12:06] Speaker 2: a strategy, as a marketing strategist, product launched strategy. I mean,
[12:11] Speaker 2: they nobody did it better, They pioneered it, they perfected
[12:13] Speaker 2: with Michael Jordan, but.
[12:15] Speaker 4: Now we see other athletes going different places. What did
[12:19] Speaker 4: they say about that? How important is that?
[12:21] Speaker 1: Yeah?
[12:21] Speaker 8: I don't know if they've spoken to that explicitly recently,
[12:24] Speaker 8: but I think, you know, it remains one of the
[12:28] Speaker 8: ways that Nike can get in front of shoppers. I
[12:31] Speaker 8: think with basketball and signature shoes, I'm not sure that
[12:34] Speaker 8: market is exactly the same as it was years ago,
[12:37] Speaker 8: but I do think getting athlete endorsement and having people
[12:41] Speaker 8: on the corridor on the field wearing their shoes remains
[12:44] Speaker 8: a big deal. The London Marathon recently Adidas one with
[12:49] Speaker 8: their shoe, their new running shoe that's five hundred dollars.
[12:53] Speaker 8: Two of their athletes beat the sub two hour marathon
[12:58] Speaker 8: record and so that was It's a huge moment for
[13:01] Speaker 8: them as a brand and still kind of shows the
[13:03] Speaker 8: way that shoes show.
[13:05] Speaker 2: I saw Steph Curry, he's now doing he left under armours.
[13:08] Speaker 6: Now for Chinese Leaning, yes exactly, of course, the brand
[13:13] Speaker 6: that was formed by the Chinese gold Olympic medal gymnasts,
[13:18] Speaker 6: who was a big, big star in the nineteen eighty
[13:20] Speaker 6: four Olympics in La Yeah. I remember watching that with
[13:23] Speaker 6: my parents and being a really big deal and I
[13:25] Speaker 6: just gave away my age. Let's go back to Nike
[13:28] Speaker 6: for a moment here, because what is Elliot Hill's strategy?
[13:31] Speaker 6: I mean, and is he thinking outside the box because
[13:34] Speaker 6: he's someone who, if I remember correctly, he was an
[13:36] Speaker 6: Internet Nike and he's kind of a Nike lifer. He
[13:39] Speaker 6: retired and he's come back. Is he capable of bringing
[13:42] Speaker 6: in like a new idea, a new way of thinking.
[13:45] Speaker 3: Yeah, that's a great question.
[13:46] Speaker 8: So I think a lot of his strategy has been
[13:48] Speaker 8: restoring Nike to what it was prior to its last CEO.
[13:52] Speaker 8: So under John Donaho, who is the CEO before Elliott,
[13:56] Speaker 8: Nike went really into lifestyle shoes. It went really into
[14:00] Speaker 8: which direct to consumer channels. That's when it cut ties
[14:02] Speaker 8: with retailers like Macy's and Amazon. And so I would
[14:05] Speaker 8: say Elliott Hill so far has been trying to get
[14:08] Speaker 8: Nike to what it was in the past.
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