Two New Entries Make The Fab 14 The Sexy 16

Oracle has long been the king of database software. Now, it has a massive new initiative driving future growth: Oracle Cloud Infrastructure.

Oracle is in the process of becoming a hyper-scaler. Will it overtake the other major providers of cloud infrastructure? Larry Ellison, even at 80 years old, is still hyper-competitive and still making exceptional claims. In the last conference call, he said this about the subject:

Oracle will be the #1 builder and operator of cloud infrastructure data centers. We will build and operate more cloud infrastructure data centers than all of our cloud infrastructure competitors combined.

I heavily discount almost anything Mr. Ellison says-and he has said many things over the many years I have watched his career. Just for the record, OCI revenues were reported to be about $3 billion last fiscal year – with growth of 52%, and the company’s guidance is for growth of more than 70% this year-growth currently is capacity constrained. Microsoft (MSFT) Azure is thought to have revenue of around $90 billion on a run rate basis and its growth rate was 31%-analysts expect that to rise.

AWS (AMZN) had run rate revenues of $116 billion last quarter-which was growth of 17%. So, Mr. Ellison has set up seemingly fantastic bogeys for the growth of OCI. Readers do not have to believe the specifics of the claim in order to form a favorable investment opinion of the shares.

Seeking Alpha, 27 June, Bert Hochfeld

OCI is Oracle’s version of the cloud. Its main competitors are AWS, Azure, and GCP (GOOG). Alibaba (BABA) Cloud is actually considered to be in #4 position with regards to market share, but I doubt that OCI actually competes against the Alibaba database to any great extent. Currently, OCI is considered to be in 5^th place with a market share of 3%. GCP is believed to have a market share of 12%, with Azure at 22% and AWS at 29%. Over the past year, Oracle has gained 1 point of market share, Microsoft has gained 2 points while AWS has lost 1 point.

OCI was initially introduced in 2016. It didn’t make much of an impact on the company for some years. Initially, the Oracle cloud was focused on the Oracle database, and it didn’t have the breadth of offerings to be competitive with the hyperscalers for anything but workloads that included Oracle’s apps and its database.

OCI has currently seen the strong acceptance it has for a variety of reasons. Basically, it is quite a bit more efficient than the technologies that are being deployed by the other hyper-scalers. It is faster, it uses less hardware, the data centers that Oracle is deploying are built to a pattern and all of them offer similar functionality, albeit at different scales. Typically, the cost of using a cloud is based on a charge per minute. Because OCI runs faster, it usually means it has a significant advantage in terms of price/performance. Public clouds typically charge users based on their minutes of usage. Since workloads that run on OCI typically run faster, the net effect is that they use fewer minutes, and fewer minutes mean lower costs.

OCI is a more automated service than its competitors. In practice, this has meant it offers a smaller threat surface than other clouds and it is more reliable overall. I have linked to a 3rd party evaluation of the advantages of Oracle’s cloud infrastructure for AI use cases. The evaluation summary speaks for itself, I believe.

A key component of OCI is its “Golden Gate” capability. It is sort of like the namesake bridge, but it used to enhance continuous data replication and movement between different DBMS. Golden Gate use cases include disaster recovery, data warehousing and analytics and stream processing analytics. Golden Gate should not be thought of as a Rubrik (RBRK) or a Snowflake (SNOW) or Confluent (CFLT) competitor-what it does may sound similar, but the use cases are much different.

It is difficult to substantiate all of the conflicting claims-of which there are many as to whose cloud is better and for which use cases. I have linked here to a listing of the various cloud infrastructure competitors. More important, I have linked here to a 3^rd party analysis of the differentiation OCI has in the market. The most salient advantages portrayed by the analysis are shown below.

Seeking Alpha, 27 June, Bert Hochfeld

There are strong parallels with the second wind for the Microsoft share price, which was also driven by the strong growth of its cloud infrastructure business.

This is a random question, but I wonder about these things. At what point in the evolutionary journey from apes to homo sapiens sapiens did we start going to heaven. Was there a cut-off point? Surely there are no apes in heaven, not the furry ones at least. Why was it only 2,000 years ago that Jesus thought humanity worth saving? When did saints stop performing miracles? Was it when human beings became less gullible? If saints can’t perform miracles, what is the point of them?

Dolphins are smart. Do they go to heaven? Are there beaches in heaven, and if so, is getting a tan still bad for you? So many questions. Did anyone ever think to ask Jesus what happened in heaven? All the attempts to describe it make it sound just a tad boring. Is there any record of Jesus mentioning Heaven, or was the whole concept dreamed up later to make recruitment easier?

When people, like the pope and all those clever cardinals, say they have faith, they believe, what exactly is it that they believe? Can we have some details? I think Trump put his finger on it.

He once said that his supporters would not give up on him if he killed somebody.

Donald Trump said Saturday that his supporters are so loyal that he would not lose backers even if he were to shoot someone in the middle of downtown Manhattan.

“I could stand in the middle of Fifth Avenue and shoot somebody, okay, and I wouldn’t lose any voters, okay?” Trump said at a rally in Sioux Center, Iowa as the audience laughed. “It’s, like, incredible.”

NBC NEws, 23 January 2016

It is less incredible if you think that Trump’s hard core supporters believe in some sense, that he is the Messiah. A messiah is right whatever he does or he would not be a messiah. These parallels between Trump and Jesus may seem outrageous but are they?

I think Catholics are like Trump’s supporters; no matter how overwhelming the evidence that their hero has feet of clay or that their views are ludicrously improbable, they go on believing. They say about fools that one is born every minute; no, millions are born every minute, and most bizarrely, some of them are very clever. Whoever dreamed up the Christian religion was a bit of a genius. The importance of faith covers all the angles. The more unlikely the proposition is, the more Brownie points for believing it.

Most incredibly, according to Time Magazine, of the 2bn Christians in the world, the majority believe in both Heaven and Hell. Unless Hell is virtually deserted, quite a few of these Christians must be destined to go there, but surely anyone, faced with an eternity of torment, would be motivated to say a few Hail Marys to avoid such a fate.

Maybe anyone who can believe the rest of the Christian package can believe that, whatever they do, they are going to Heaven.

One theory is that non-believers all go to Hell. Pity the poor indigenous inhabitants of Papua New Guinea on their receipt of the bad news.

“I am going to Hell.”

“Fraid so.”

“Why?”

“Because you do not believe in Jehovah and Jesus.”

“Who?”

“God and Jesus, you benighted savage.”

“But I have never heard of them.”

‘That’s tough.”

Religion is wonderful. An endless source of amusement for those of us untroubled by a shred of belief.

After that long aside, back to Robinhood, named after another legendary figure who may or may not have existed. He even had a Virgin Mary in the form of Maid Marian and a Satan in the form of the Sheriff of Nottingham. Good, evil and innocence incarnate. A story as old as time.

Robinhood, the company, is IG on steroids and growing at a rapid rate. The company has modest ambitions.

If I had to sum up the quarter, what I’m most excited about is the incredible product velocity. And it was across our three focus areas, which if you remember, are building the number one platform for active traders, being number one in wallet share for the next generation and building the number one global financial ecosystem.

Vladimir Tenev, CEO and cofounder, Robinhood, Q1 2025, 30 April 2025

There is so much going on at Robinhood.

When I look at our active trader offering, it just keeps getting more disruptive. We launched futures and prediction markets in Q1, and futures are accelerating nicely. So about 4.5 million contracts traded in April alone, which is more than all of Q1. So Q1, which was a strong quarter, greatly was accelerated in April. And prediction markets have done over 1 billion contracts in the last six months. And we’ve recently started to increase the breadth of the contracts we offer. So we’re still very much in the early stages there.

On Robinhood Legend, which if you remember, we announced at HOOD Summit late last year and launched fully a few months after that, we’ve been making a lot of improvements. We’ve upgraded speed. We’ve brought in new asset classes like crypto and index options. We’ve added support for joint accounts, more indicators, and charts, and really more features being shipped on a weekly basis. So the team has just been executing incredibly quickly on making Robinhood Legend the best platform for active traders. And all of that has been driving strong incremental volume on the Legend platform.

There’s actually a lot more to come. The team is already spending a lot of time preparing for the second annual active trader event, which we’ll be holding this fall. We’re also working to serve far more of our customers’ assets. So at our Lost City of Gold event just this past March, we announced three new products: Robinhood Strategies, Robinhood Cortex, and of course, Robinhood Banking. Pretty awesome that Robinhood Strategies already has over 40,000 customers and over $100 million in assets. So that’s gone off to a very rapid start. Robinhood Gold. So when you look at the Gold Credit Card, we doubled the Gold cardholders to 200,000 just in the past few weeks. And we love what we’re seeing. We know that there’s a ton of excitement about getting the credit card from customers. We see it on social media and in the questions, and we’re excited to accelerate the rollout from here. So, we’ve already doubled and it’s going to continue.

Retirement assets, they’re now up to $16 billion, which is up about 20% just from the start of the year. And we closed the acquisition of TradePMR, brining over $40 billion of platform assets to Robinhood. And on global financial ecosystem, this is our 10-year arc, we continue to make the U.K. brokerage offering better and better, and we’re working on launching in Asia. So, we’re excited about that. Bitstamp acquisition, still on track to close mid-year. And we’re heads down getting things ready for the crypto event, which will be in France in two months. So we’re very excited about that. There’s going to be some new things unveiled.

And wrapping it all up. As a result of the strong product velocity, we saw strong business results as well. Revenue is up 50% year-over-year. Trading volumes all up double digits year-over-year including a record quarter for options trading. Record Net Deposits as well – $18 billion of Net Deposits in the quarter.

So I’m glad to see the strategy is working. Customers are not only trading more with us, but they’re entrusting us with more of their assets. Gold Subscribers nearly doubled year-over-year to 3.2 million as of the end of the quarter and actually now 3.3 million in April. And that’s a 12% plus adoption rate overall. But if you look at new customers who joined Robinhood in Q1, about one in three became Gold Subscribers relatively quickly.

And we look on international, that’s continuing to accelerate. We are now up to over 150,000 international customers, and that’s just going to keep going and going. So we feel great about our product velocity and the business results that it’s driving.

Vladimir Tenev, CEO and cofounder, Robinhood, Q1 2025, 30 April 2025

There is more to learn about Robinhood as a business, but the chart, fundamentals, and story all look extremely positive and full of potential. If I am right and a mega (MAGA) bull market is coming, Robinhood looks ideally placed to prosper.

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