1 00:00:02,520 --> 00:00:08,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio News, The. 2 00:00:08,720 --> 00:00:12,560 Speaker 2: Stock Movers Report, your roundup of companies making moves in 3 00:00:12,600 --> 00:00:15,880 Speaker 2: the stock market harnessing the power of Bloomberg Data. 4 00:00:16,960 --> 00:00:19,240 Speaker 1: Let's take a look now at some stocks making news 5 00:00:19,280 --> 00:00:21,720 Speaker 1: in the week ahead. I'm Nathan Hager, joined by Bloomberg 6 00:00:21,760 --> 00:00:25,319 Speaker 1: Equities reporter Matthew Griffin on another week where we're going 7 00:00:25,400 --> 00:00:29,480 Speaker 1: to see some pretty big names reporting earnings starting on Tuesday, 8 00:00:29,560 --> 00:00:32,519 Speaker 1: when we'll be in the cloud with Oracle. Could we 9 00:00:32,560 --> 00:00:36,240 Speaker 1: see a benefit for Oracle from the AI spending boom? 10 00:00:36,280 --> 00:00:40,159 Speaker 3: Matthew, Well, Nathan, I think that is the question that 11 00:00:40,280 --> 00:00:43,040 Speaker 3: is going to be front and center of investors' minds 12 00:00:43,080 --> 00:00:49,880 Speaker 3: because the huge outlays on AI from Oracle have been 13 00:00:49,960 --> 00:00:53,320 Speaker 3: greeted enthusiastically on Wall Street in the past and have 14 00:00:53,479 --> 00:00:57,160 Speaker 3: been punished on Wall Street. I mean, you just look 15 00:00:57,240 --> 00:01:01,520 Speaker 3: at what the stock did in twenty twenty four, up 16 00:01:01,560 --> 00:01:04,200 Speaker 3: sixty one percent, a twenty percent boost last year. All 17 00:01:04,240 --> 00:01:09,039 Speaker 3: of this AI spending, their move to position themselves as 18 00:01:09,160 --> 00:01:14,640 Speaker 3: an AI cloud provider made Oracle a darling on Wall Street. 19 00:01:15,920 --> 00:01:19,520 Speaker 3: But after that you have had questions arise about what 20 00:01:19,600 --> 00:01:22,120 Speaker 3: the return is going to be on this spending. The 21 00:01:22,160 --> 00:01:27,000 Speaker 3: stocks now down about fifty percent from its September record high, 22 00:01:27,200 --> 00:01:30,440 Speaker 3: and you actually saw the shares plunge in December after 23 00:01:30,480 --> 00:01:34,319 Speaker 3: the company raised its spending on data centers. So they're 24 00:01:34,360 --> 00:01:37,840 Speaker 3: reporting in a moment where this is really a question. 25 00:01:38,000 --> 00:01:39,920 Speaker 1: And the reporting in a moment where we've just heard 26 00:01:39,920 --> 00:01:42,600 Speaker 1: in the last few days that Oracles has plans to 27 00:01:43,240 --> 00:01:47,760 Speaker 1: cut thousands of jobs just ahead of this earnings report. 28 00:01:47,840 --> 00:01:51,000 Speaker 1: What more do investors want to see from Larry Ellison's company? 29 00:01:51,000 --> 00:01:57,520 Speaker 3: Matthew, Yes, I think they're going to be looking again 30 00:01:57,720 --> 00:02:01,920 Speaker 3: at this cost benefit payoff. I mean, you have analysts 31 00:02:01,960 --> 00:02:06,480 Speaker 3: looking for revenue growth here they see just under sixteen 32 00:02:06,520 --> 00:02:09,760 Speaker 3: billion dollars of revenue versus fourteen billion in the year 33 00:02:09,800 --> 00:02:14,200 Speaker 3: ago quarter. And I think that's also at the heart 34 00:02:14,240 --> 00:02:16,840 Speaker 3: and center of whether these tens of billions of dollars 35 00:02:16,919 --> 00:02:19,440 Speaker 3: of capital expenditure are going to pay off on the 36 00:02:19,480 --> 00:02:24,400 Speaker 3: top and ultimately the bottom line. You see that in 37 00:02:24,440 --> 00:02:28,320 Speaker 3: the reports of some of the Magnificent seven companies this quarter, 38 00:02:28,400 --> 00:02:31,639 Speaker 3: where again it's the question not just of are you 39 00:02:31,680 --> 00:02:34,680 Speaker 3: spending are you an AI player, but are you generating 40 00:02:34,800 --> 00:02:39,400 Speaker 3: revenue to fund those expenditures. The job cuts are actually 41 00:02:39,520 --> 00:02:43,080 Speaker 3: aimed at freeing up money to pay for capital expenditures 42 00:02:43,120 --> 00:02:45,720 Speaker 3: for the AI boom. That's what people familiar with the 43 00:02:45,760 --> 00:02:50,320 Speaker 3: matter have told us. So again, I think investors are 44 00:02:50,320 --> 00:02:52,839 Speaker 3: going to be looking for both sides of the ledger there. 45 00:02:53,040 --> 00:02:56,040 Speaker 1: Now we're going to hear another side of the AI story. 46 00:02:56,080 --> 00:02:59,639 Speaker 1: I think probably on Thursday when Adobe reports. I got 47 00:02:59,639 --> 00:03:01,560 Speaker 1: to think this is one of those stocks that's been 48 00:03:01,639 --> 00:03:04,960 Speaker 1: caught up in the question about whether software companies are 49 00:03:05,000 --> 00:03:07,800 Speaker 1: going to be hit by the AI disruption. 50 00:03:08,760 --> 00:03:14,919 Speaker 3: Yes, Nathan, Adobe shares have tumbled actually during what investors, 51 00:03:14,919 --> 00:03:17,880 Speaker 3: the analysts have started to call these SaaS apocalypse, this 52 00:03:18,520 --> 00:03:26,320 Speaker 3: giant selloff in software stocks. Adobe's shares again, you think 53 00:03:26,360 --> 00:03:29,880 Speaker 3: about this happening in you know, the last couple of months, 54 00:03:29,880 --> 00:03:32,960 Speaker 3: but these concerns have really been swirling for a while. 55 00:03:33,000 --> 00:03:35,880 Speaker 3: Adobe down about twenty percent year to date, but actually 56 00:03:35,880 --> 00:03:39,080 Speaker 3: got a really lukewarm reception on Wall Street back in December, 57 00:03:39,120 --> 00:03:42,320 Speaker 3: even though they had a pretty upbeat forecast, because you 58 00:03:42,400 --> 00:03:46,440 Speaker 3: already had people questioning do the numbers matter now if 59 00:03:46,640 --> 00:03:49,600 Speaker 3: what you do can be replicated by cheap AI tools, 60 00:03:50,040 --> 00:03:56,160 Speaker 3: So the commentary on that may be as important. You know, 61 00:03:56,200 --> 00:03:59,360 Speaker 3: whether the company sees itself as shielded as any actual 62 00:03:59,480 --> 00:04:00,000 Speaker 3: number there were. 63 00:04:00,520 --> 00:04:02,880 Speaker 1: And has there been a question as well about whether 64 00:04:03,160 --> 00:04:07,760 Speaker 1: the AI tools that Adobe says it has are going 65 00:04:07,840 --> 00:04:10,160 Speaker 1: to have their own payoff. It's been kind of dealing 66 00:04:10,160 --> 00:04:11,760 Speaker 1: with that struggle as well, hasn't it. 67 00:04:12,520 --> 00:04:17,080 Speaker 3: Yes, absolutely so. I was looking at what analysts were saying, 68 00:04:17,160 --> 00:04:21,440 Speaker 3: and what Piper Sandler says is investors are going to 69 00:04:21,520 --> 00:04:25,320 Speaker 3: be honing in on metrics related to how much money 70 00:04:25,320 --> 00:04:28,440 Speaker 3: the company is making from AI. Now they do see 71 00:04:28,640 --> 00:04:33,800 Speaker 3: that the stock may be de risked here. The company 72 00:04:33,920 --> 00:04:37,400 Speaker 3: has given guidance, you know, taking a step back again, 73 00:04:37,440 --> 00:04:39,640 Speaker 3: the shares have slid, and so they actually see that 74 00:04:39,720 --> 00:04:44,080 Speaker 3: there could be some upside here if AI adoption is 75 00:04:44,200 --> 00:04:46,720 Speaker 3: better than expected. But yes, I think you're absolutely right. 76 00:04:46,760 --> 00:04:48,240 Speaker 3: That's a key question for investors. 77 00:04:48,560 --> 00:04:51,320 Speaker 1: And along with those marquee names in the tech space, 78 00:04:51,360 --> 00:04:53,400 Speaker 1: we're going to hear from a big name in retail 79 00:04:53,520 --> 00:04:56,880 Speaker 1: when Cole's opens its books. I guess the question here 80 00:04:57,040 --> 00:04:58,960 Speaker 1: is how's the consumer doing? 81 00:04:59,480 --> 00:05:05,640 Speaker 3: Yes, absolutely, Cole's is the latest big consumer name. They 82 00:05:05,640 --> 00:05:10,880 Speaker 3: are estimated to report next week. And you know, the 83 00:05:11,320 --> 00:05:14,480 Speaker 3: question of the health of the American consumer is really 84 00:05:14,720 --> 00:05:17,520 Speaker 3: another thing. This front and center for investors' minds, as 85 00:05:17,520 --> 00:05:20,000 Speaker 3: if they didn't have enough to think about. You know, 86 00:05:20,400 --> 00:05:25,480 Speaker 3: you think about us unexpectedly shedding jobs. You've had this 87 00:05:25,600 --> 00:05:28,960 Speaker 3: idea that consumers are trading down, but actually Coals so 88 00:05:29,080 --> 00:05:32,720 Speaker 3: far has held up against this backdrop. They raised their 89 00:05:32,760 --> 00:05:39,240 Speaker 3: full year outlook in November because consumers had shown that 90 00:05:39,279 --> 00:05:42,320 Speaker 3: they were willing to spend on brands that they really wanted. 91 00:05:42,720 --> 00:05:46,240 Speaker 3: And so again, so far, Cole's has been a relative 92 00:05:46,240 --> 00:05:48,600 Speaker 3: winner here. But I don't think investors see that as 93 00:05:48,640 --> 00:05:50,680 Speaker 3: a guarantee, and they're going to be looking closely at 94 00:05:50,800 --> 00:05:54,520 Speaker 3: consumer behavior and I think again at the commentary from 95 00:05:54,839 --> 00:05:58,279 Speaker 3: executives about whether the consumer's under pressure, what that looks like. 96 00:06:00,120 --> 00:06:04,479 Speaker 2: Stockmover's report from Bloomberg Radio. 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