Speaker 1: Bloomberg Audio Studios, podcasts, radio News, The.
Speaker 2: Stock Movers Report, your roundup of companies making moves in
Speaker 2: the stock market harnessing the power of Bloomberg Data.
Speaker 1: Let's take a look now at some stocks making news
Speaker 1: in the week ahead. I'm Nathan Hager, joined by Bloomberg
Speaker 1: Equities reporter Matthew Griffin on another week where we're going
Speaker 1: to see some pretty big names reporting earnings starting on Tuesday,
Speaker 1: when we'll be in the cloud with Oracle. Could we
Speaker 1: see a benefit for Oracle from the AI spending boom?
Speaker 3: Matthew, Well, Nathan, I think that is the question that
Speaker 3: is going to be front and center of investors' minds
Speaker 3: because the huge outlays on AI from Oracle have been
Speaker 3: greeted enthusiastically on Wall Street in the past and have
Speaker 3: been punished on Wall Street. I mean, you just look
Speaker 3: at what the stock did in twenty twenty four, up
Speaker 3: sixty one percent, a twenty percent boost last year. All
Speaker 3: of this AI spending, their move to position themselves as
Speaker 3: an AI cloud provider made Oracle a darling on Wall Street.
Speaker 3: But after that you have had questions arise about what
Speaker 3: the return is going to be on this spending. The
Speaker 3: stocks now down about fifty percent from its September record high,
Speaker 3: and you actually saw the shares plunge in December after
Speaker 3: the company raised its spending on data centers. So they're
Speaker 3: reporting in a moment where this is really a question.
Speaker 1: And the reporting in a moment where we've just heard
Speaker 1: in the last few days that Oracles has plans to
Speaker 1: cut thousands of jobs just ahead of this earnings report.
Speaker 1: What more do investors want to see from Larry Ellison's company?
Speaker 3: Matthew, Yes, I think they're going to be looking again
Speaker 3: at this cost benefit payoff. I mean, you have analysts
Speaker 3: looking for revenue growth here they see just under sixteen
Speaker 3: billion dollars of revenue versus fourteen billion in the year
Speaker 3: ago quarter. And I think that's also at the heart
Speaker 3: and center of whether these tens of billions of dollars
Speaker 3: of capital expenditure are going to pay off on the
Speaker 3: top and ultimately the bottom line. You see that in
Speaker 3: the reports of some of the Magnificent seven companies this quarter,
Speaker 3: where again it's the question not just of are you
Speaker 3: spending are you an AI player, but are you generating
Speaker 3: revenue to fund those expenditures. The job cuts are actually
Speaker 3: aimed at freeing up money to pay for capital expenditures
Speaker 3: for the AI boom. That's what people familiar with the
Speaker 3: matter have told us. So again, I think investors are
Speaker 3: going to be looking for both sides of the ledger there.
Speaker 1: Now we're going to hear another side of the AI story.
Speaker 1: I think probably on Thursday when Adobe reports. I got
Speaker 1: to think this is one of those stocks that's been
Speaker 1: caught up in the question about whether software companies are
Speaker 1: going to be hit by the AI disruption.
Speaker 3: Yes, Nathan, Adobe shares have tumbled actually during what investors,
Speaker 3: the analysts have started to call these SaaS apocalypse, this
Speaker 3: giant selloff in software stocks. Adobe's shares again, you think
Speaker 3: about this happening in you know, the last couple of months,
Speaker 3: but these concerns have really been swirling for a while.
Speaker 3: Adobe down about twenty percent year to date, but actually
Speaker 3: got a really lukewarm reception on Wall Street back in December,
Speaker 3: even though they had a pretty upbeat forecast, because you
Speaker 3: already had people questioning do the numbers matter now if
Speaker 3: what you do can be replicated by cheap AI tools,
Speaker 3: So the commentary on that may be as important. You know,
Speaker 3: whether the company sees itself as shielded as any actual
Speaker 3: number there were.
Speaker 1: And has there been a question as well about whether
Speaker 1: the AI tools that Adobe says it has are going
Speaker 1: to have their own payoff. It's been kind of dealing
Speaker 1: with that struggle as well, hasn't it.
Speaker 3: Yes, absolutely so. I was looking at what analysts were saying,
Speaker 3: and what Piper Sandler says is investors are going to
Speaker 3: be honing in on metrics related to how much money
Speaker 3: the company is making from AI. Now they do see
Speaker 3: that the stock may be de risked here. The company
Speaker 3: has given guidance, you know, taking a step back again,
Speaker 3: the shares have slid, and so they actually see that
Speaker 3: there could be some upside here if AI adoption is
Speaker 3: better than expected. But yes, I think you're absolutely right.
Speaker 3: That's a key question for investors.
Speaker 1: And along with those marquee names in the tech space,
Speaker 1: we're going to hear from a big name in retail
Speaker 1: when Cole's opens its books. I guess the question here
Speaker 1: is how's the consumer doing?
Speaker 3: Yes, absolutely, Cole's is the latest big consumer name. They
Speaker 3: are estimated to report next week. And you know, the
Speaker 3: question of the health of the American consumer is really
Speaker 3: another thing. This front and center for investors' minds, as
Speaker 3: if they didn't have enough to think about. You know,
Speaker 3: you think about us unexpectedly shedding jobs. You've had this
Speaker 3: idea that consumers are trading down, but actually Coals so
Speaker 3: far has held up against this backdrop. They raised their
Speaker 3: full year outlook in November because consumers had shown that
Speaker 3: they were willing to spend on brands that they really wanted.
Speaker 3: And so again, so far, Cole's has been a relative
Speaker 3: winner here. But I don't think investors see that as
Speaker 3: a guarantee, and they're going to be looking closely at
Speaker 3: consumer behavior and I think again at the commentary from
Speaker 3: executives about whether the consumer's under pressure, what that looks like.
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