Is Oracle (ORCL) &quot;throwing money at the wall?&quot; It&#x27;s the question Tom White and Jenny Horne debate as the company ups its debt funding to $40 billion. Jenny talks about how Oracle raising its RPO by $85 billion is a positive, but she admits the risk comes in whether the company can execute on all of its backlog. She also touches on Intel&#x27;s (INTC) double upgrade and price target hikes in Arm (ARM) and AMD Inc. (AMD). ======== Schwab Network ======== Empowering every investor and trader, every market day. Subscribe to the Market Minute newsletter - https://schwabnetwork.com/subscribe Download the iOS app - https://apps.apple.com/us/app/schwab-network/id1460719185 Download the Amazon Fire Tv App - https://www.amazon.com/TD-Ameritrade-Network/dp/B07KRD76C7 Watch on Sling - https://watch.sling.com/1/asset/191928615bd8d47686f94682aefaa007/watch Watch on Vizio - https://www.vizio.com/en/watchfreeplus-explore Watch on DistroTV - https://www.distro.tv/live/schwab-network/ Follow us on X – https://twitter.com/schwabnetwork Follow us on Facebook – https://www.facebook.com/schwabnetwork Follow us on LinkedIn - https://www.linkedin.com/company/schwab-network/ About Schwab Network - https://schwabnetwork.com/about

ORCL Raises AI Execution Risk, INTC Double Upgrade, AMD & ARM PT Hikes

Schwab Network

# Full Transcript

**Podcast:** Schwab Network

## Participants

- **Jenny Hornee** (None)

## Transcript

Alright, now that we've had a breakdown of where markets are as we set up for this Thursday, let's bring in our first guest. It's going to be Jenny Hornee. She's the co-host of NextGen Investing to help me break down some of this market action today. You know what? I came in this morning and I was like, hey, there's not a lot of news, but futures are rebounding. We had the Oracle earnings after the close yesterday. That stock's under pressure. It was a pretty good report, Jenny, but you throw in some stuff about raising more capital and traders

don't like that. They don't like it. I think evidenced by yesterday's Supermicro, I know a different story, but it was seeing some significant contraction on the day after, of course, it's news that it was raising another $7 billion in cash. And so I think that this is just the latest right now cash constraint you're seeing from a company like Oracle, which frankly has tapped net markets before this year and also faced criticism over that. So I think that the timing of this is really interesting. Now, when you look at some of the headline numbers, I mean, it was a pretty clean beat, no doubt about it.

Growth for their revenue was up still 21% year over year. Cloud remains the core growth driver with 47% of their overall contribution to their revenue. Now, cloud infrastructure in its own right rose 93%. That is a key number, obviously driven by AI workloads, data center demand, but cloud applications or some of the software as a service tools that they have rose another 10%. So slower, but still steady from an enterprise demand standpoint.

Now, software and license support did see that's the more of their legacy business that actually was down roughly about 2% year over year and services within that segment rose 13%, hardware was up 9%. So clearly the mix is shifting more towards cloud AI infra.

So that's not really a new narrative, but it's definitely one that's continuing. CapEx is up now 162% from last year. And as far as planning, they're planning another 70 billion in future spending, fundraising another 40 billion in debt and equity. This is the biggest debate. So huge investments obviously are essential to build AI, but it raises questions over these returns and dilution. And also does then give some further question about like the actual proof of monetization.

And as we were saying yesterday, Supermicro making a huge move lower. We were like, this is what the concern is, is that these companies are now to leverage Oracle at least has like longevity on its side. It's obviously been able to ride any volatility over the last like several decades, but I do understand the risk of like without proven concept yet. This is a lot of money.

Yep. And you start taking a look at the capital raise, you know, they need additional funds. That's the concern for investors, but you've got to make these inve...

ORCL Raises AI Execution Risk, INTC Double Upgrade, AMD & ARM PT Hikes

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ORCL Raises AI Execution Risk, INTC Double Upgrade, AMD & ARM PT Hikes

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.