ORCL an A.I. "Frontrunner," TSLA Bull Note, Capital Requirements Up for Big Banks

Published: Sep 09, 2024 Duration: 00:09:46 Category: Education

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hold that step one keep the market together right now. It's trying. Would be nice if we got maybe a new leader to fill in the gaps. While Nvidia flails a bit. Oracle perhaps that leader Diane King Hall joining us from New York. Big breakout big chart. Yeah really nice move for Oracle. Take us through the details Diane. Yeah I mean look Oracle is moving higher on track to post a new record in terms of its share price reaction to its latest quarterly report card. It beat on both the top and bottom line. Wall Street also liked the guidance. Adjusted EPs came in at a buck 39 a share that was better than expected. The expectation was about 32 a share. Revenue came in at 13.3 billion. That was also better than expected in terms of its different verticals cloud infrastructure revenue came in at or cloud infrastructure came in at 2.2 billion. Cloud overall revenue came in at 5.6 billion. Cloud applications was 3.5 billion. And then Oracle is projecting in terms of the road ahead that earnings growth will come in in a range in the current quarter between 8 and 10%. So it just shows continued momentum on its earnings call, the CEO Safra Catz, said that, quote, I will say that demand is still outstripping supply, but I can live with that end quote. That's clearly being well received by Wall Street. The company has talked about its plans for data center increase. They have 162 data centers as of date. But their plan, their view is that according to Larry Ellison, that they would be aiming for 2000, some 2000 data centers. They're getting some love from the analyst community as well. JMP securities upgrading Oracle to outperform from market perform. They have $175 price target now on its shares. I'm seeing a good bit of hikes to the expectations. Jefferies to 170 from 150. Morgan Stanley to 145 from 125. Anyone who's been a doubter might need to rethink it. JP Morgan at 120. Starting to look a little bit like they're in yesteryear. Wake up analysts, you got a very few stocks making this chart. I mean it feels like you got to respect it after so much broke down in the AI and tech category. Oracle just blasting off. I mean the numbers are incredible. The amount of growth and all of their cloud stuff. You know you just take out the hardware side which is down on premise, which is, you know, slower, but that's pretty amazing too. Is that even the cloud license and on premise license is still up 7.5%. So something like their legacy revenues are hanging in there. And then all the new cloud stuff just booming, you know, infrastructure up almost 50%. It's wild. That's right. I mean, look, I know Safra Catz is the CEO now, but you never underestimate Larry Ellison. And this company has transformed from a legacy company to a front runner company in terms of the AI space. The JMP saying, quote, the company's revenue growth is accelerating because it has, quote, successfully evolved into a leading strategic cloud platform services provider. Once again, the stock being rewarded with a double digit advance on track for a fresh record high. Amazing. And it seems like also finally, arguably like the phase two of AI leadership because it was so hardware and chip focused with Nvidia and who was going to be able to replicate or keep up with them. Oracle kind of telling us all right, we're moving down sort of the supply chain here moving forward, where now you've got all the cloud centers. The demand there, the actual services that are going to be applied and going to require all that power and all that storage and processing from the data centers. So you can kind of see how we're working our way closer to the customer. The end product. I kind of like Oracle is carrying the torch of the AI story for now. I mean, the chart is so much better than Nvidia. So safe to say this is now a really key market leader. Yeah, indeed. I mean, year to date the stock is up more than 40% year to date. So you know and then and then when you look at a five year chart of it, it just it's just a mountain. Yeah. Amazing. Okay. So all credit to Oracle Safra Catz Larry and the team. All right. Let's go to Tesla. Volatile week was doing pretty well while stocks were selling off last week. And then it got wrapped up in the downside on Friday. And then trying to hold 220 bucks here. Fresh buy rating from Deutsche Bank. Pretty juicy too. 2.95. Yeah. And look this their thesis behind this matches up with what Elon Musk is trying to do. Clearly So again they have a buy rating 2.95. Price target for Tesla now from Deutsche Bank. They've resumed coverage of the I would say EV maker. But they see it as more than that. They say quote they don't see Tesla as an auto maker, but rather a technology platform attempting to reshape multiple industries deserving of a unique type of valuation framework. So they talked about the lead that Tesla has in battery EVs in terms of the leader has in both scale and cost. They say that they see them commanding outsized brand value globally. They talked about obviously the near term has been bumpy, looks bumpy due to deliveries. What margin looks like within the space? We know that the EV space has been challenged this year, not just for Tesla, but they recognize that. But they say that's you know, basically it looks like that's a bump in the road in their view for Tesla. And that Tesla is more than a carmaker. Yeah. As I think it is. And as I think it kind of is demonstrating now is it's trading on its own that it still has enough Tesla specific stuff going on to separate it out a little bit from a lot of our other discussion. I don't think so much connected to the macro. I mean, it is a little bit it definitely is to some extent last year, I think for sure, given that they had to cut all their prices, that was very macro as the economy kind of slowed down and people dialed back their spending. Obviously Tesla's price war with their peers was macro driven. But now arguably, if that's been kind of seen through for the moment, then the stock might be able to revert to other themes trading on themes like the robo taxis trading on themes like, you know, the infrastructure they're building out for charging and whatnot. I could see how Tesla could kind of extract itself from the broader market, which, I mean, it's a pretty unique looking chart. Is it a great looking chart? Not necessarily, but it's unique and it seems specific to Tesla. Yeah. Agreed. I mean, look, Tesla is not the traditional car maker at all or traditional EV maker. I should say. Right. As they try to build out beyond that. So, you know, they're being rewarded with these with these moments right now. Can they turn these moments into momentum? It remains to be seen. We'll obviously keep watching for October when we hear more about the robo cabs. Yeah, they've got moments I like that to shine. And well, they got to live up to them. So big, big, I mean, as big as, like whatever Apple's unveil is for their phone. Tesla with the robo stuff going to be huge, a fresh faith from the street, though, never hurts. So 295 shares up 2%, while the market's kind of mixed. Lastly, let's talk banks for a second. Regulators reducing capital requirement requirements. Yeah. So this is going to maybe make a difference for some of these. Yeah it's a win for the banks in terms of they had been lobbying for reduced capital requirements. So the new capital requirements that are being proposed is 9%. Not seeing a big reaction in terms of I mean, you're seeing a mixed reaction in terms of the big banks, you know, so basically, here's the deal. The largest, the biggest lenders now could face a 9% increase in capital requirements. The original plan was calling for as much as a 19% increase in capital requirements that they would have to have as just protection against financial shocks, unexpected losses. We know all of those rules came about after the Great Recession, financial crisis. So the banks had been pushing for reduced requirements, and now it looks like they will have that. Now there will be a 60 day comment period, after this is ultimately revealed, because, you know, this is reported right now. It's according to Bloomberg, but it's expected to be revealed today. Right now, you're seeing a mixed reaction in the pre-market. The big banks were reacting more positively to this, but it looks like it's a little bit of, you know, just a muted reaction now. Okay. Yeah, nothing really changed too much. They've been doing really well. Wells Fargo up probably, you know one that likes to hear anything about financials having looser regulations even though it's not going to, apply to them. So much.

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