✌️ Two Big Tech earnings reports this week – Oracle and Adobe – could double as a gut check for the AI trade. Oracle will give us a read on the infrastructure layer – the pipes and power behind AI – while Adobe will offer a glimpse into whether consumers and businesses are actually willing to pay for the things AI can do. Both are expected to show strong year-over-year growth – but, as always, the devil will be in the details. 👀 Oracle’s cloud infrastructure business has been on fire, growing nearly 50% last quarter on demand from OpenAI, Nvidia, and others. But with its multibillion-dollar Stargate data center expansion underway, the spotlight is now on margins. Some analysts are warning that the project could chew through all of Oracle’s cash flow next year. So it’s worth keeping an eye on bookings and future obligations – if those key measures keep rising, that'll tell you that demand is still hot. If not, the market will start to wonder whether Oracle’s gone too far, too fast with its spending. 🥧 Adobe’s challenge is simpler: it’s aiming to turn AI excitement into sales. It’s embedding its Firefly tools across the creative suite, and looking to double its annual recurring revenue (ARR) from AI by the end of the year. And so far, not so good: the ARR recently sat at a modest $125 million – a sliver of Adobe’s overall pie. So this quarter, it’s hoping to show that users aren’t just playing with AI features – they’re paying for them, too. 🤠 Together, these results will tell the market something bigger: whether AI is moving from hype to usefulness. If Oracle shows strong, sustainable demand and Adobe proves it can charge for features, it could add fuel to the broader tech rally. But if not, AI’s big frontier may start to look like it’s all hat and no cattle. |
