markets

Luke Kawa10/7/25

Oracle tumbles after report that it’s lost nearly $100 million from renting out access to Nvidia’s Blackwell chips

You buy Nvidia’s flagship chips because they’re supposed to be best in class, empowering you to build better AI capabilities or make lots of money off other companies that want to harness the power of the AI boom.

Not quite, per this report from The Information, whose final paragraph begins with this line:

“In the three months that ended in August, Oracle lost nearly $100 million from rentals of Nvidia’s Blackwell chips, which arrived this year.”

The report notes that some of this is a timing issue, a gap between getting data centers equipped for use and when customers start paying for services.

Oracle, which was roughly flat, quickly fell more than 5% as traders digested this report. Shares of Nvidia, which were up nearly 2% at their highs of the day, turned negative.

Citing internal documents, The Information says that Oracle’s “fast-growing cloud business has had razor-thin gross profit margins in the past year or so,” booking a gross profit of $125 million on rentals of servers that utilize Nvidia chips for the three months ending in August, for a gross margin of just under 14%.

The damage in markets is far from localized in those two stocks, however. In a reversal of how OpenAI’s deal with AMD buoyed the AI trade on Monday, this news is sparking a broad-based retreat.

Nvidia’s top AI chip rival, Broadcom, went from flat to down 2%, with memory chip specialist Micron and foundry giant TSMC also well in the red. Neocloud companies Nebius and CoreWeave, disk drive sellers Western Digital and Seagate Technology Holdings, and zero-revenue nuclear energy firm Okloare among the other stocks selling off on the news.

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Matt Phillips38m

AST SpaceMobile rises after favorable commentary from BofA

Mobile-services-from-space play — and retail investor favorite — AST SpaceMobile rose after receiving a target price upgrade from Bank of America analysts.

In a note published Thursday, BofA telecom services analysts lifted their price target for the stock to $100 from $85, while noting that the low-Earth orbit satellite industry — which supercharged stocks like Rocket Lab, Planet Labs, and AST in 2025 — is set to gain more attention this year:

“We expect the momentum to intensify in 2026 as providers like ASTS and Starlink jockey to offer full cellular service and capture subscribers. Debates will likely grow regarding Starlink’s plans to offer full cellular service and regulatory decisions on Ligado and EchoStar spectrum transactions are events to watch. Carrier partnerships could evolve and pricing and plan decisions should be clearer by year end as ASTS approaches full constellation operability.”

Still, they maintained their “neutral” rating on the stock, saying they “await progress on ASTS 1) fully producing and subsequently launching its BlueBird satellite constellation, 2) successfully operating the constellation, and 3) capturing subscribers and turning them into revenue paying subscribers before becoming more constructive on the story.”

The market has been less reticent: the money-losing company’s shares are up approximately 300% over the last year.

Morgan Stanley: Most Gen Zers and millennials in the US listen to about three hours of AI music a week

That’s enough AI music to last the run time of “Avatar.”

WNBA: JUN 23 Indiana Fever at Chicago Sky

Max Knoblauch2h

Bulls pour into Joby and Archer options as Trump's push for record defense budget boosts eVTOL names

Options traders appear bullish on electric aircraft makers like Archer Aviation and Joby Aviation on Thursday, with large volumes boosting the stocks following President Trump’s call for a record $1.5 trillion US military budget for 2027.

Both companies, as well as newly public rival Beta Technologies, have sizable defense contracts. In July, Archer CEO Adam Goldstein told Sherwood News that he believes the company’s defense side will outpace its civil air taxi service for at least a decade.

Traders seem to believe him. As of 10:53 a.m. ET, about 31,000 Archer call options had exchanged hands, around 9,000 short of its 20-day average for a full day. Joby saw roughly 20,000 call options traded by the same time, eclipsing its 20-day average. For the most actively traded calls for Joby and Archer (C$17s expiring February 20 and C$9s expiring on Friday, respectively), volumes on the ask side are outstripping the bid or mid, indicating motivated buyers.

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J. Edward Moreno2h

Insurers rise as House tees up ACA extension vote

Several health insurers rallied on Thursday as the House of Representatives is expected to pass a measure extending the Affordable Care Act tax credits that expired at the end of 2025.

The scheduled vote comes after a group moderate Republicans broke with leadership to revive the bill, as rising health premiums create a political liability for lawmakers up for election in the midterms this year. While it’s expected to pass the House with support from those Republicans, it faces an uphill battle in the Senate.

The biggest providers of ACA Marketplace plans, like Oscar Health, Molina Healthcare, Centene and UnitedHealthcare, rose on the news.

The ACA tax credits, which subsidize health insurance plans provided by private insurers, were part of a 2021 COVID-19 relief package passed by a Democrat-controlled Congress. The credits expired at the end of 2025, and health premiums are expected to skyrocket as insurers adjust for rising costs of care.

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Matt Phillips2h

Bloom Energy surges on fuel cell deal with utility

Fuel cell maker and momentum stock favorite Bloom Energy ripped early Thursday, after American Electric Power said one of its subsidiaries would exercise an option — from a previous agreement — to buy additional Bloom products for a fuel cell power plant in an agreement worth $2.65 billion.

AEP also said it had signed a “20-year deal with an unnamed customer to supply the entire output from the fuel cell generation facility that will be located near Cheyenne, Wyoming.”

Analysts at Evercore ISI wrote:

“We view this as a meaningful positive for Bloom as it sheds light on the demand for its product and provides investors insight into the fact that the AEP contract will result in volumes well above the minimum commitment, which had previously been rather opaque.

Additionally, this should also provide confidence in Bloom’s customer diversification as many had typically tethered the company directly to Oracle, given the company’s announced collaboration with the company in July 2025.”

With Thursday morning’s surge, Bloom Energy is up more than 400% over the last 12 months, in a rally driven by investor excitement about surging power demand related to AI data centers. While the company has been profitable — on an adjusted basis — over its last four quarters, it’s also highly valued, with a price-to-forward earnings multiple of more than 100x.

American Electric Power signs $2.65 billion deal for fuel cells

American Electric Power signs $2.65 billion deal for fuel cells

Analysts at Evercore ISI wrote:

“We view this as a meaningful positive for Bloom as it sheds light on the demand for its product and provides investors insight into the fact that the AEP contract will result in volumes well above the minimum commitment, which had previously been rather opaque.

Additionally, this should also provide confidence in Bloom’s customer diversification as many had typically tethered the company directly to Oracle, given the company’s announced collaboration with the company in July 2025.”

With Thursday morning’s surge, Bloom Energy is up more than 400% over the last 12 months, in a rally driven by investor excitement about surging power demand related to AI data centers. While the company has been profitable — on an adjusted basis — over its last four quarters, it’s also highly valued, with a price-to-forward earnings multiple of more than 100x.

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