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Jon Keegan & David Crowther

Oracle sinks as cloud division misses and company plans $15 billion more capex

Shares of Oracle fell in after-hours trading Wednesday — and remained under pressure in the premarket session Thursday morning, down more than 11% as of 5:20 a.m. ET — after a headline beat on earnings was overshadowed by softer revenue.

Adjusted earnings per share were $2.26, up 54% year on year, blowing past analyst expectations of $1.64 per share. However, this beat was primarily due to the disposal of its Ampere chip company to SoftBank, which boosted pretax earnings by $0.91 per diluted share, Barron’s reported.

Revenue for the quarter was $16.06 billion, up 14% year on year but missing estimates of $16.2 billion.

The big weakness weighing most heavily on the stock this morning seems to be Oracle’s cloud computing unit, where sales came in at $8 billion for the quarter, up 34% year on year. Analysts had been expecting $8.8 billion.

The other major talking point heading into the print — how much Oracle was investing in capex for new data centers — has proven to be another sticking point again. On the earnings call, Doug Kehring, the company’s principal financial officer, said:

“...given the added RPO this quarter that can be monetized quickly starting next year, we now expect fiscal 2026 CapEx will be about $15 billion higher than we forecasted after Q1.”

That will do little to alleviate concerns around Oracle’s diverging free cash flow and net income, though the company’s execs did also say that they expect total cloud revenue to grow 40% to 44% in the coming quarter. Leadership also said they believe they can convert some of the added backlog to revenue sooner than expected, adding $4 billion of “additional revenue in FY27.”

Oracle shares got a huge boost in September, after the company announced a $300 billion deal with OpenAI, but all of that value has since disappeared. Shares are up 30% for the year so far.

Last quarter, Oracle reported $455 billion in RPOs (remaining performance obligations, or backlogged business). For this quarter, the figure was up to $528 billion, having risen 438% from the same period last year.

On selling its interest in the Ampere chip company, Oracle Chairman and CTO Larry Ellison said:

“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

Oracle shares got a huge boost in September, after the company announced a $300 billion deal with OpenAI, but all of that value has since disappeared. Shares are up 30% for the year so far.

Last quarter, Oracle reported $455 billion in RPOs (remaining performance obligations, or backlogged business). For this quarter, the figure was up to $528 billion, having risen 438% from the same period last year.

On selling its interest in the Ampere chip company, Oracle Chairman and CTO Larry Ellison said:

“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

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Max Knoblauch

Budget airline stocks dip as Spirit pilots ratify contract that’ll help the carrier stay afloat

Low-cost airlines JetBlue and Frontier are trading lower on Thursday following the news that Spirit Airlines pilots ratified modifications to their labor contract that will lower costs for the carrier, which filed for bankruptcy in August.

According to the Air Line Pilots Association (ALPA), Spirit pilots approved a deal that included “temporary reductions to pay rates and retirement contributions.” Beginning January 1, hourly pay will be reduced 8% and retirement contributions will drop by half from 16% to 8%.

"Spirit pilots made a difficult choice that provides the Company with what it needs from labor to secure financing and complete its restructuring,” said Captain Ryan P. Muller, chairman of the Spirit Airlines Master Executive Council.

Wall Street sees Jetblue and Frontier as the biggest beneficiaries to Spirit’s woes, and both carriers have attempted to purchase Spirit in recent years.

markets
Matt Phillips

Planet Labs rips on strong earnings report

Satellite services company Planet Labs was on track for a new record closing high after rising more than 35% in early afternoon trading on Thursday.

The roughly $5 billion company posted better-than-expected quarterly results and guided toward higher-than-expected sales for the current quarter after the close of trading Wednesday.

“AI continues to be a major tailwind as the company is seeing significant demand through enhanced capabilities for its advanced satellite data solutions,” wrote Wedbush tech analyst Dan Ives, adding “We continue to believe the PL is well-positioned at the intersection of Space and AI.” He has an “outperform” — basically a “buy” — rating and a price target of $20 on the stock.

Other satellite services AST SpaceMobile and Rocket Lab also enjoyed a bump on Thursday, seemingly riding the momentum of Planet Labs’ numbers.

Planet Labs Stock Soars After Earnings Report. Why Shares Are Headed to the Moon.

Planet Labs Stock Soars After Earnings Report. Why Shares Are Headed to the Moon.

“AI continues to be a major tailwind as the company is seeing significant demand through enhanced capabilities for its advanced satellite data solutions,” wrote Wedbush tech analyst Dan Ives, adding “We continue to believe the PL is well-positioned at the intersection of Space and AI.” He has an “outperform” — basically a “buy” — rating and a price target of $20 on the stock.

Other satellite services AST SpaceMobile and Rocket Lab also enjoyed a bump on Thursday, seemingly riding the momentum of Planet Labs’ numbers.

The East Side of the US Capitol Building in the early morning, Washington DC, USA.

Health insurers rise after the Senate rejects competing healthcare plans

The Democratic plan would have extended tax credits, while the GOP plan would have replaced them with HSAs.

J. Edward Moreno1h
markets
Max Knoblauch

Rivian sure picked a bad time for its AI Day as investors dump tech stocks

The event coordination team at Rivian is probably having a bad one, as investors dumped the stock ahead of its “Autonomy and AI Day” amid a broader AI trade sell-off.

Heading into the event that began at noon ET, Rivian shares were down 5%, following a strongly negative reaction to Oracle’s earnings results. The stock began climbing as Rivian’s event started, but remains in the red on the day.

A year flush with tariffs and the end of the EV tax credit has pushed Rivian to pitch a techier version of its future. During Thursday’s event, Rivian said its forthcoming vehicles would ditch Nvidia chips for its own AI chips produced by Taiwan Semiconductor.

The vehicles will feature lidar sensors, enabling “level 4” autonomous driving (similar to Google’s Waymo), the company said. According to CEO RJ Scaringe, the updates will allow Rivian to “pursue opportunities in the rideshare space,” hinting at future robotaxi plans, which rivals Tesla and Lucid have already begun.

Wall Street appears skeptical of Rivian, with Morgan Stanley this week downgrading the stock to “underweight” and dropping its price target to $12. Lucid, which in October announced it’s planning a privately owned autonomous car built with Nvidia tech, also received a downgrade.

Rivian turns to AI, autonomy to woo investors as EV sales stall

Rivian turns to AI, autonomy to woo investors as EV sales stall

A year flush with tariffs and the end of the EV tax credit has pushed Rivian to pitch a techier version of its future. During Thursday’s event, Rivian said its forthcoming vehicles would ditch Nvidia chips for its own AI chips produced by Taiwan Semiconductor.

The vehicles will feature lidar sensors, enabling “level 4” autonomous driving (similar to Google’s Waymo), the company said. According to CEO RJ Scaringe, the updates will allow Rivian to “pursue opportunities in the rideshare space,” hinting at future robotaxi plans, which rivals Tesla and Lucid have already begun.

Wall Street appears skeptical of Rivian, with Morgan Stanley this week downgrading the stock to “underweight” and dropping its price target to $12. Lucid, which in October announced it’s planning a privately owned autonomous car built with Nvidia tech, also received a downgrade.

markets
Luke Kawa

Robinhood tumbles after November trading volumes post monthly drop across equities, options, and crypto

Robinhood Markets is getting crushed today, and not just because it’s the place where people go to buy AI stocks (which are under big pressure after Oracle’s earnings report). As stocks retreated in November, activity on the platform did, too.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

The brokerage reported that November trading volumes fell across equities, options, and crypto compared to October. Equity notional volumes were down 37% month on month, options contracts traded were off 28%, and crypto notional volumes fell double digits. The bright spot: its prediction markets business is still in boom mode, with 3 billion contracts traded, up 20% versus the prior month.

Cantor Fitzgerald analyst Brett Knoblauch trimmed his price target on the shares to $152 from $155 following this release, noting that this monthly decline was somewhat expected.

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