Oracle (ORCL): Megawatts Are the New Liquidity

By Juri von Randow · 23 September 2025 · Tuesday Target 39/52 2025

How the AI power buildout works as stealth stimulus, why Oracle (ORCL) sits near the meter, and why index calm hides single-stock risk.

Liquidity Arrives as Megawatts

The letter starts somewhere odd for a stock write-up: the electricity grid. Each new data-centre campus is, underneath, an order for transformers, turbines, copper, substations and a crew of electricians with more work than hours. I treat that as stimulus in a hard hat. It lands in GDP early, fills contractor order books for years, and lifts the price of anything that carries or consumes an electron. Nobody voted on it and nobody calls it fiscal policy, which is exactly why it works.

Once power becomes the scarce input, the pecking order rearranges itself. Whoever holds the interconnect, the permit and the plot beside the substation owns the toll booth; everyone else queues and pays what the booth charges. That is also my reading of chips and gold climbing side by side. Assets that share nothing on a spreadsheet are agreeing on a single thing: money is losing its patience, physical bottlenecks are gaining it, and the long bond has to carry the bill. The Fed helped the story along by cutting into upgraded growth and firmer inflation, a move that only makes sense as insurance against a softening labour market. Meanwhile the wealthiest households do most of the spending, so retail prints look healthy while the bottom of the ladder feels tariffs and debt.

Oracle Sits Next to the Meter

Oracle earns its place because it sits near the meter rather than at the far end of the software cable. It already hosts TikTok's American data, and the terms under discussion would put the algorithm and its security under Oracle's management on U.S. soil. That bolts a political catalyst onto a name the market has already filed under infrastructure, and the catalyst could arrive ahead of schedule. If the melt-up keeps running, and the letter files this under 'prices can only go up' without much embarrassment, I want exposure to a stock fed by both the capex wave and the headline.

For an options trader the shift runs deeper than the ticker. The old sequence, software first and pipes later, has inverted, and the vol surface has followed. Index volatility has dozed off while individual stocks lurch about, so the cheap premium sits in the index and the expensive action sits in single names like this. Structure matters more than direction. My book carries a sizeable negative delta, leaning bearish, so a bullish Oracle position works as a counterweight rather than a pile-on. That is the barbell from the letter in practice: a high-beta leg, distressed value on the other end, and neither allowed to outgrow the handle. The construction itself, the breakeven logic and the drawdown I am prepared to sit through stay in the letter.

Dealers Nap Into the Blackout

The calm has plumbing behind it. Dealers are long gamma, so every move gets absorbed and the tape looks sedated. The cushion is thinning from both sides: buybacks are in their blackout window and pensions are lining up roughly $22B of equity sales into month-end. Remove the corporate bid, add a mechanical seller, and a single sharp headline can turn scattered wobbles into a chorus moving together. Long gamma damps the swing right up until it doesn't.

The calendar supplies candidates. Friday's core PCE, expected near 0.2% on the month and holding inflation just under 3%, decides whether the risk-management cut survives contact with data. Thursday brings the final revision to last quarter's GDP, with housing, durable goods and sentiment filling in the edges. Above it sits a crowded Fed roster: Powell on Tuesday, Bowman more than once, and a run of regional presidents. I read bond volatility and credit before I read equities, because credit tends to smell trouble first. If the grid really is the new balance sheet, the tell will show up in the cost of funding it long before it shows in Oracle's chart.

This page is the write-up. The full letter, with the trade and its exit rule, is on Substack.

• ORCL

AI power grid buildout · Bullish options setup · Fed rate cut