-
Oracle (ORCL) fell 38% from its highs despite a prior blowout quarter that sent shares up 35% in one day.
-
Oracle reports earnings in early December with high debt and OpenAI client concentration as key investor concerns.
-
NVIDIA CEO Jensen Huang stated AI is going everywhere and doing everything after the company posted strong third quarter results.
-
If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here
Just when you thought tech was about to rollover into a vicious bear market or the so-called “AI bubble” would burst in a way that would bring back memories of the dot-com bust at the turn of the millennium, markets turned sharply higher, with AI stocks leading the rebound. Undoubtedly, it may be a bit too early in the game to think that the AI sell-off is over or that it will be contained to November, especially after Nvidia (NASDAQ:NVDA) retreated after exceptional results while markets seemingly overlooked the tremendously bullish comments from its CEO and founder, Jensen Huang, who said a lot of upbeat things about AI and where it’s headed next.
Perhaps the most discounted thing Mr. Huang said was that “AI is going everywhere, doing everything, all at once.” Undoubtedly, Jensen wants to sell more AI chips, but what’s more, he also sees strength across the board. And the numbers from his company’s latest third quarter seem to confirm it. Either way, if AI is going everywhere (beyond tech) to other industries, it might be too soon to write Nvidia or the AI trade-off as a bubble that’s in the process of bursting.
In any case, there’s enough material here to feed the bulls as AI looks to transform some of the less obvious industries that might still be off the radars of most investors. As to whether AI ends up doing “everything” is a giant question mark that we don’t have the answers to quite yet. There’s much fear about AI replacing workers, but with humans in the loop, perhaps AI won’t be doing absolutely everything. However, it will do a lot more and, with that, employees will eventually be able to do enough such that they won’t need as many human colleagues.
Undoubtedly, it’s tough to tell which direction markets move in from here. Perhaps the solid Monday for tech is nothing more than a “fake out” trade. Time will tell. Regardless, investors who haven’t yet done any buying may wish to check out the slate of deals that exists today.
Oracle (NYSE:ORCL) has taken one of the hardest hits in recent months. It seems like a distant memory when the company pulled the curtain on a blowout that sent shares soaring 35% in a day. The stock is way lower than it was going into that number. And with another quarter due in just over two weeks, some big questions will need to be answered before Oracle stock considers its next move.
In a prior piece highlighting Oracle stock as a great buy on the dip, I noted the known concerns: the debt load is quite hefty, and the OpenAI exposure is getting too large for the liking of many. That said, there’s potential to diversify as it wins more AI contracts, perhaps across the board. If AI is expanding as rapidly as Jensen Huang suggests, perhaps the risks surrounding Oracle’s aggressive debt-fuelled push are overblown.
For now, Oracle seems to be a “poster child” of sorts for the AI bubble bust. Though it’s too early to use the term “bubble,” at least in my opinion, there are folks out there who are looking at a more than 35% loss in shares of Oracle. To them, it feels like a bursting of the bubble. But the big question is whether Oracle can turn the tide come its next quarterly earnings report, slated for early December.
Moving ahead, some more Fed rate cuts would be welcomed news, as would be a response from OpenAI after the game-changing Gemini 3.0 launch from its top rival, Google.
Either way, it feels like investors aren’t feeling all too great about the debt to fuel the AI infrastructure spending or OpenAI’s footing in the AI race (it has its own debt load to manage as well) as Oracle marches into its next quarterly earnings result. That’s a good thing, in my view. Either way, Oracle stands out as more of a multi-year AI infrastructure play, a volatile one (mind the incredibly high 1.64 beta) that could rise to the occasion if it steers clear of pitfalls.
Just as investors overreacted to that last quarter (35% pop in a day), I think investors are overreacting on the way down (now down 38% from highs). If the next quarter reveals more explosive OCI growth, new partnerships (trim that client overconcentration risk), or a clearer path forward on debt management, perhaps Oracle stock could be one of the best stock market deals you’ll come by this Black Friday as shares hover around $200 per share.
You may think retirement is about picking the best stocks or ETFs, but you’d be wrong. See even great investments can be a liability in retirement. The difference comes down to a simple: accumulation vs distribution. The difference is causing millions to rethink their plans.
The good news? After answering three quick questions many Americans are finding they can retire earlier than expected. If you’re thinking about retiring or know someone who is, take 5 minutes to learn more here.