On CNBC’s Squawk on the Street, Jim Cramer made a call that resonated across chip and cloud names: the tech tape is bouncing. And that Oracle may be the most interesting contrarian setup in the group. Alongside Carl Quintanilla and David Faber, Cramer framed Monday’s rally as “revenge of that” Friday selloff, arguing “we’re seeing a lot of people who are saying, look, it’s time to go back in the group.”
The rebound is playing out against a backdrop of extraordinary data center capital spending, and Cramer’s questions center on whether the buildout will pay off for anyone other than the model developers.
Oracle: A Losing Streak Meets a Buildout Thesis
Oracle (NYSE: ORCL | ORCL Price Prediction) has been the pain trade of the summer. Shares traded at $142.50 as of Monday morning, after falling 42.32% over the past month from a June 2 close of $244.58.
Cramer zeroed in on the fundamental question behind that drawdown: “The Stargate data center in Saline Township that I visited cost $16 billion to build and another $30 to $35 billion, largely from Oracle, to outfit it. Are they going to get the return on that?” He noted that recent big layoffs and share losses might actually flag “the screaming buy of the group”, adding that even skeptical sources have started warming to the setup.
The numbers behind the buildout are substantial. In Oracle’s Q4 FY2025 report, cloud infrastructure revenue jumped to $5.79 billion, up 93% year over year. Remaining Performance Obligations reached $638 billion, a 363% year-over-year increase, with $75 billion tied to prepaid or customer-supplied GPU arrangements. Management reaffirmed its FY2027 revenue target of $90 billion, guided Q1 FY2027 cloud revenue growth of 58% to 64%, and raised its FY2027 non-GAAP EPS target to $8.05. Free cash flow was negative $23.7 billion against $55.7 billion in capital expenditures, and the company plans to raise roughly $40 billion through debt and equity in FY2027 to fund the expansion.
NVIDIA Confirms the Scale of the Buildout
Cramer’s paradox—”Shouldn’t we see some profits in compute for somebody other than the much-loved Anthropic?”—hits at the top of the chain. NVIDIA (NASDAQ: NVDA) reported Q1 FY2027 revenue of $81.61 billion, up 85.2% year over year, with Data Center revenue of $75.25 billion, up 92% year over year. Non-GAAP EPS of $1.87 beat consensus estimates, and guidance for the next quarter called for $91 billion in revenue at a 75.0% gross margin.
Meta Platforms (NASDAQ: META) raised its 2026 capital expenditure (capex) guidance to $125 billion–$145 billion, up from its prior range of $115 billion–$135 billion, citing higher component pricing and, to a lesser extent, additional data center costs. Q1 FY2026 revenue was $56.31 billion, up 33% year over year, while diluted EPS came in at $10.44, including an $8.03 billion income tax benefit.
What to Watch
The Cramer thesis puts Oracle at the center of the return-on-buildout debate. With remaining performance obligation (RPO) backlog visibility, a $90 billion FY27 revenue target, and hyperscaler-grade contracts already booked, the question moves from demand to execution. Investors will look for progress on escalator clauses, tenant payoff timelines, and whether Oracle’s Stargate outfitting spend converts into the multi-year cloud margin story management has promised.
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