Episode summary
Oracle Shares Surge Most Since 1992 on Cloud Contract Wins | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Scarlet Fu, Alexis Christoforous · Guests: Anurag Rana, Sam Fazeli, Niraj Patel, Diana Rosero Pena
Summary
Oracle’s share surge was driven by a radically larger cloud-infrastructure opportunity than the market had been assuming, with the host and a guest emphasizing that AI training demand is pushing Oracle Cloud Infrastructure into a much bigger role. The guest argued that Oracle can spend aggressively because it pairs high-margin database and applications businesses with a fast-growing infrastructure unit, and he pointed to more than $35 billion of planned capex and about half a trillion dollars in bookings as signs of scale. He also said Oracle is still small versus AWS, Microsoft Azure and Google Cloud, but that its relative size may be an advantage in growth terms.
The conversation framed Oracle less as a zero-sum winner and more as one of several infrastructure beneficiaries in the buildout phase of AI. The guest said the key customers and partners are AI developers such as OpenAI and chip supplier Nvidia, while application-layer software firms like Salesforce and Workday are not getting the same tailwind. He also said fears of an AI bubble are premature because demand is still backed by a backlog of orders.
The rest of the show turned to corporate stress points elsewhere: Novo Nordisk cut 9,000 jobs and lowered profit guidance again as competition from Eli Lilly intensifies; Synopsys disappointed on weak design IP revenue despite AI-related tailwinds; and Chewy’s mixed quarter showed sales growth but softer margin confidence amid tariffs and heavy investment.
Key takeaways
- Oracle’s cloud growth is being driven by AI demand, and the guest said the company is prepared to spend over $35 billion next year to expand capacity.
- The guest said Oracle is still far smaller than AWS, Microsoft and Google Cloud, but its smaller base makes its growth rate more explosive.
- Novo Nordisk is restructuring 9,000 jobs, or about 11% of its workforce, to free up cash for R&D and counter Eli Lilly’s pressure.
- Synopsys’ design IP business, about 30% of sales, went flat after years of roughly 15% growth, which the guest called a major shock.
- Chewy’s quarter was mixed: sales improved, but investors focused on held margin guidance, tariff pressure and slower customer-growth momentum.
Notable quotes
“one of the advantages it has is it just rents out its you know servers for people to go out and train their AI models or you know run their applications on it”
“They came out and said they're going to spend over 35 billion uh on in you know the next financial year”
“Right now we are more in the build phase of AI, not the implementation phase of AI”
“This business now is going flat. It was tracking to about 15% growth as of 2Q and the remaining two quarters are a big shock”
“they have mentioned that private label uh their private brands are significantly uh affected by tariffs”
How the episode opens
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Investors are partying like it's 1999. Investors in Oracle that is. And that's because the last time the stock rallied this much was 1999. Stock is up, as John just said, nearly. — You weren't even alive back then, the two of you.
Oh, go on. — We remember the do bubble days. — Oh, never mind.
So, I want to bring in Annie Ragana now, Bloomberg intelligence technology analyst. He was around in 1999. Uh, coming to us from from our Chicago bureau.
Okay, so we know that, you know, it was a blowout quarter. AI just driving things there. But I want to talk a little bit about traditional software, which is what this company is all about.
And the fact that that's not really working at Oracle, but it doesn't seem like investors care today. Anog?
Yeah, I see. Oracle is a very unique company because it has your traditional software, but also a few years ago, it started a cloud business called Oracle Cloud Infrastructure, something very similar to what AWS does or Microsoft Azure. Um and one of the advantages it has is it just rents out its you know servers for people to go out and train their AI models or you know run their applications on it.
So this is really a new business for them you know just came up last few years and that's where the biggest growth is and that's what's driving the stock.
That's what's driving the stock and that's probably where Oracle is driving its spending as well.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- oracle cloud outlook
- ai computing demand
- novo nordisk layoffs
- synopsys design ip revenue
- chewy earnings outlook
Companies and tickers mentioned
- ORCL
- NVO
- LLY
- SNPS
- CHWY
- Oracle
- Novo Nordisk
- Eli Lilly & Co.
- Synopsys
- Chewy
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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