markets

Jon Keegan10/17/25

Analysts generally like what they heard from Oracle, but shares are down

The big news out from the Oracle AI World conference was broadly positive: that margins on cloud infrastructure can be as high as 35%, and that the company predicts $166 billion in infrastructure revenue by 2030.

And in the wake of that news, today UBS raised its price target for Oracle shares to $380 from $360, saying they are undervalued.

But investors appear to have some concerns about Oracle’s huge capex plans, which are fueled by huge AI infrastructure deals with OpenAI and Meta, as shares dropped over 7% in Friday trading.

Analysts have pointed to Oracle’s high cash burn as it pursues its AI build-out and potential financing needs as flies in the ointment that could blunt the impact of the company’s strong longer-term growth forecasts.

On Friday, Jefferies analysts wrote:

“Questions remain about ORCL’s capex requirements to meet growing demand, as there was no forward-looking commentary on capex at the Analyst Day. Capex will need to ramp in line with [Oracle cloud infrastructure] revenue growth, raising concerns about ORCL’s financing options to support this expansion.”

However, if that’s the reason why the stock is getting hit today, it would mark a distinct change in how investors are evaluating the AI trade. Companies have tended to be increasingly rewarded for their aggressive capex commitments to enhance the boom, based on optimism that investments in this would-be revolutionary technology will bear fruit.

Friday’s dip comes on the back of a strong run leading up to the yesterday’s investor conference, fueled by a flurry of AI headlines. Oracle shares have gained over 18% in the past three months and more than 70% so far this year, well outpacing the Nasdaq’s approximately 7% and 16% rise over the same time periods.

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Matt Phillips18m

Citi initiates coverage of Planet Labs with “buy” rating

Planet Labs was up after aerospace and defense analysts at Citi initiated coverage with a “buy/high risk” rating and $19 price target.

The stock is up more than 40% this week, after a strong earnings result that spotlighted the company’s growing opportunity in linking its core business of capturing daily images of the planet with AI technologies.

Citi analysts noted the potential for a positive flywheel effect for Planet Labs as it deepens its focus on integrating AI into its offerings:

“AI is accelerating the conversion of pixels to decisions, where Planet’s daily scan and deep archive offer a uniquely large training corpus and broad-area foundation for automation. AI-enabled solutions (MDA/GMS/AMS) are gaining traction with customers such as NATO and the U.S. DoW, validating the approach of integrating AI into broad-area monitoring products... These AI moves create a compounding advantage: more coverage generates more training data, which improves models, which in turn increases product utility and addressable demand.”

The stock has also caught the attention of some of the retail trading crowd, with call options activity spiking on Thursday as traders rode the market reaction to the results.

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Max Knoblauch33m

After a good night’s rest, investors decide they liked Rivian’s AI Day event, sending the stock surging

Wall Street didn’t seem to care very much about Rivian’s AI news when it dropped yesterday, but today is a new day.

Shares of the EV maker are up more than 16% on Friday morning, with call volumes already at about 70% of their 20-day average just 20 minutes into the trading session. The price action propelled Rivian stock to its highest level since January 2024.

Following Rivian’s Thursday event, in which it said it would replace Nvidia chips with its own and hinted at a robotaxi plan, Needham & Co. sharply hiked its price target on the company from $14 to $23. Analyst Chris Pierce wrote that the AI event “strengthened [Needham’s] conviction in RIVN’s longer term autonomy roadmap and points of differentiation vs legacy OEMs.”

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J. Edward Moreno1h

Fermi drops after tenant terminates $150 million contract

Fermi fell in early trading on Friday after it disclosed that its first tenant for its planned Project Matador power grid site has terminated its $150 million contract.

Fermi, which was cofounded by former Energy Secretary Rick Perry, plans to build nuclear energy infrastructure to power data centers. In September, Fermi announced that it had entered into a nonbinding letter of intent with a tenant to lease a portion of Project Matador. That contract was terminated on Thursday, Fermi said in a Friday regulatory filing.

Fermi, which currently generates no revenue, said it is talking to other potential tenants for the Project Matador Site and “remains confident that it will be able to meet its expected power delivery schedule at Project Matador as the demand for behind-the-meter power for AI remains robust over the near and long term.”

Fermi, which went public in October, is now down more than 70% since its IPO. Last month the company had its first quarterly earnings report, in which it reported steeper-than-expected losses.

J. Edward Moreno

Weed stocks rally on reports that Trump admin is close to reclassifying marijuana

It’s not the first (or second or third) time that the Trump administration has been rumored to be considering reclassification.

Jar full of marijuana buds

markets

Max Knoblauch2h

JPMorgan downgrades Roblox, says hits like “Steal a Brainrot” are past their peak

Shares of kid-focused gaming platform Roblox fell about 3% in premarket trading on Friday following a downgrade by JPMorgan to “neutral” from “overweight.”

As part of the firm’s 2026 outlook, analyst Cory Carpenter cited key headwinds that could dampen Roblox’s prospects next year. Among them: the need for more viral hits like “Grow a Garden” and “Steal a Brainrot,” which Carpenter says are past their peaks.

According to JPMorgan, further engagement hits could also come from Russia’s ban of the platform (the bank noted that Russia’s ban could affect up to 10 million daily active users, as it’s a top five market) and the facial age estimation rollout coming next month, which Roblox has said may “negatively impact platform engagement in the short term.”

Also looming for Roblox and the entire gaming industry is Take-Two’s expected mass hit “Grand Theft Auto VI.” Per Carpenter, the rollout of the Fornite and Unity Software partnership could also create more noise for Roblox.

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