Connecting Oracle’s Massive RPO Announcement to 4 Portfolio Holdings

We have seen multiple surprises in the last 16 hours, from Oracle’s ORCL over-the-top cloud forecast and Klarna’s KLAR higher-than-expected IPO price, to this morning’s far-cooler-than-expected August Producer Price Index and Taiwan Semi’s TSM August revenue report. That combination and some strong words from Alphabet GOOGL about its cloud business are poised to lead the market higher Wednesday.

On the positive side, this likely means we will see the S&P 500 move past last night’s record close, stretching its valuation that much further. Despite the continued gains in both the S&P and the Nasdaq Composite, neither is overbought based on their relative strength index levels. This suggests that if we see a similar cooler-than-expected print in Thursday's August Consumer Price Index, something that would lift Fed rate cut prospects, the market melt-up should continue.

When we game out Oracle’s cloud forecast and the infrastructure it requires, the ensuing benefit to our holdings should give them some added lift. We’re talking Nvidia NVDA, Marvell MRVL, Eaton ETN, United Rentals URI, and others. Those last two are also among the subset in the Pro Portfolio that will benefit from reduced interest rates, something that should lower the hurdle rate for construction projects. Earlier this week, we discussed what we’ll be watching for in a turn from the housing market, one that would benefit ETN and URI shares as well as Vulcan Materials VMC, and also likely see us bring a new holding into the fold.

As we watch Klarna’s post-IPO price performance and the string of IPOs yet to come this week and next, we’re already formulating revised price targets for Morgan Stanley MS and Bank of America BAC.

Oracle’s Massive RPO Announcement

Last night, Oracle reported its latest quarterly results, and while some may have something to say about that performance, the larger market is focused on its remaining performance obligation (RPO) comments. If you missed our primer on RPO and backlog figures, you can read it here, but it’s safe to say Oracle wowed the crowd with that outlook.

While the company’s fiscal first-quarter cloud results were slightly below expectations and fiscal 2026 guidance was left unchanged, its RPO hit $455 billion, up a staggering 359% year over year. That figure benefited from $322 billion in books during the quarter, but that number is only expected to grow further. Oracle said it expects to sign up several additional multi-billion-dollar customers, and RPO is likely to exceed half a trillion dollars.

That sets the stage for the company’s upcoming October Financial Analyst Meeting that will update management’s multi-year outlook. Ahead of that, Oracle expects Oracle Cloud Infrastructure revenue to grow 77% to $18 billion this fiscal year and then increase to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years. Working the math, it appears that most of the revenue in that five-year forecast is already booked in the company’s RPO.

Our view is that this sets the stage for continued AI and cloud adoption, a positive for our positions in ServiceNow NOW and Palantir PLTR. It also reinforces the large capital spending comments of late from Meta META, CoreWeave CRWV, and others that keep us bullish on multiple Pro Portfolio holdings.

Google Cloud Is Holding Its Own and Then Some

At the Goldman Sachs Communicopia & Technology Conference yesterday, Google Cloud CEO Thomas Kurian shared that much like we saw above with Oracle, its RPOs have been growing faster than segment revenue. At $106 billion, more than 50% of that RPO translates into revenue over the coming two-plus years.

One other thing that stood out in Kurian’s comments was that the business has seen a “37x increase in the volume of data being used” in its AI storage and “a 27x increase in the volume of data processed in our data cloud, BigQuery, with Gemini.” That certainly caught our attention, given our view on how AI adoption will drive incremental capital spending for enterprise and carrier networks.

As AI adoption ramps further, we remain bullish on the opportunity for network and related chips at both Nvidia and Marvell.

Taiwan Semi’s August Revenue Report

We’ll close out this Alert with TSM’s August revenue report, which rose 33.8% year over year, bringing its quarter-to-date revenue up 30% compared to year-ago levels.

We see this speaking to stronger second-half 2025 capital spending levels from Big Tech on AI and data center, but also the expected ramp in smartphone, AI PC, and other connected device volumes.

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At the time of publication, TheStreet Pro Portfolio was long NVDA, MRVL, GOOGL, NOW, PLTR, MS, BAC and META.