👀 Oracle's borrowed boom

SCOREBOARD

Thursday close. S&P down 0.6%, a broad down day, with Oracle off 5.4% before its results even landed. On the week: Nvidia −2.70%, S&P −0.98%, Nasdaq −0.52%.

ON WATCH

Oracle fell more than 5% on Thursday, then leapt around 7% in after-hours trading the second its results landed. The market had spent the regular session braced for bad news and got a blowout instead.

Revenue came in at $19.3 billion, up 30% on the year, and cloud infrastructure, the rent-a-data-centre business, grew 121%. Adjusted profit was $1.92 a share against the $1.74 Wall Street expected.

The number that moved the stock was the backlog: $664 billion of contracted future revenue, up $209 billion in a single year. That's real money customers have promised to pay Oracle, and it dwarfs the company's annual sales.

Here's the catch. Oracle spent $28 billion building in just three months, ran slightly negative free cash flow, and is guiding to $90 to $95 billion of capital spending this year, a bill it is largely covering by borrowing.

More than half of that backlog reportedly rests on a single customer, OpenAI, through the roughly $300 billion Stargate compute deal. To be fair, the contracts are signed, demand for AI computing is genuine, and Oracle says the pipeline keeps growing.

SPONSORED

AI is moving from experiment… to essential.

Every major industry is integrating it.
Every major company is investing in it.

By late 2025, AI was already an $800B market — growing at a pace that could push it well beyond $1 trillion in the years ahead.

Cloud infrastructure is scaling fast.
AI-enabled devices are multiplying.
Automation is becoming standard.

But here’s the real question…

When trillions flow into this transformation — which stocks stand to benefit most?

Our new report reveals 10 AI stocks positioned across the backbone of this shift — from the companies powering the infrastructure… to those embedding intelligence into everyday systems.

If you want exposure to one of the defining growth trends of this decade, start here.

Download the Report Now

THE MACHINE

Oracle shows the pattern in miniature. Across the big five spenders, capital spending on AI is set to top $1 trillion through 2026, running well ahead of the revenue coming back.

So the gap gets filled with debt. The AI hyperscalers issued about $159 billion of bonds in the first five months of this year alone, more than they borrowed in the previous five years put together, according to the IMF.

Let Meerkat translate. Chipmakers and clouds invest in the AI labs, the labs spend it right back on those same chips and clouds, and the Bank for International Settlements has named this loop one of the three biggest risks to the global financial system.

The case against the panic is real too. Nvidia's Jensen Huang calls the circular-financing label ridiculous, the biggest spenders still fund most of their building from profit, and Oracle's $664 billion of orders is money customers have already signed for.

SOMEONE SMART SAID

Burry is the investor who shorted the housing bubble in 2007, the one Christian Bale played in "The Big Short". He closed his fund in 2025 and now posts warnings on a Substack called Cassandra Unchained, and lately they're nearly all about AI.

He was writing about Nvidia's pledge to backstop up to $105 billion of one customer's data-centre spending. His point: a chip seller that has to guarantee its own buyer's bills is a chip seller worried the bills won't otherwise get paid.

He was famously early on housing, too, wrong for two years before the meltdown proved him right.

THE CHART

Data centres now borrow much the way homeowners once did, by bundling future rent into bonds and selling them on. Outstanding data-centre securitizations have climbed from about $4 billion in 2020 to roughly $61 billion this year, per SFA Research and Barclays. Around $25 billion of these bonds priced in 2025 alone, more than the previous three years put together, and 2026 is already well past that.

These bonds are a long way from the subprime mortgages Burry made his name on. They are mostly investment-grade, backed by long contracts with cash-rich tenants, so the real worry is concentration and disclosure, and the SEC has just loosened some disclosure rules for exactly these deals.

HEADS UP

ON THE HORIZON

MEERKAT ON YOUTUBE

Why A US Debt Default Now Looks Genuinely Possible. The government owes more than it can comfortably roll over, and Meerkat walks through how a default would actually play out and what it would do to your savings. Watch on Meerkat Explains Finance.

THE BURROW

Quick vote. Oracle's order book hit $664 billion, but most of it reportedly rests on one customer and it's borrowing to build. Bullish, or bubble?

Trivia. Michael Burry reached for Enron this week. Enron hid billions in debt in off-balance-sheet partnerships, one named JEDI. What did that stand for? Answer's at the bottom of the email. No peeking.

ALSO WORTH YOUR INBOX

Meerkat's own morning read: Crypto Nutshell, the same crew tracking the other mania, the one with coins in it.

That's the week. Two days away from the machines, then Meerkat's back Monday at 6:30.

Got a friend whose bond fund is quietly buying data centres? Forward them this.

Meerkat is not telling you to buy anything, sell anything, or short anything. Meerkat is not a financial adviser. Meerkat is a small animal with a whiteboard and a data-centre bond it does not understand. Please do not sue Meerkat.

TRIVIA ANSWER

Joint Energy Development Investments. Enron's JEDI partnership, and its sequel Chewco, named after Chewbacca, kept debt off the books until the whole thing unravelled in 2001.