🔮 Oracular Spectacular

There was a lot riding on what Oracle reported after the bell on Tuesday. Last month, the cloud company told investors that it plans to raise $45 billion to $50 billion to fund its ambitious AI data center build-out, raising anew questions about whether all this spending is worth it. 

There were also rumors it would announce steep job cuts — thousands of positions across the company — and even freeze hiring in its cloud division. But despite a wave of analysts recently lowering their price targets for the company, the future looks pretty promising after these Q3 results:

• Sales of $17.2 billion (estimate: $16.9 billion).

• Adjusted earnings per share of $1.79 (estimate: $1.70).

• Oracle’s closely watched capex for the quarter was $18.64 billion (estimate: $14 billion).

Looking forward, the company’s RPO (remaining performance obligations, or backlog) swelled to a massive $553 billion, far above analysts’ consensus expectation of $537.8 billion and a strong sign of future sales growth. 

Management also raised its sales outlook for the next fiscal year to $90 billion, with analysts forecasting $86.7 billion. The math the company supplied one quarter ago for its fiscal 2027 sales equaled an even lower figure than that.

The Takeaway

It’s been a rough 2026 for the hyperscaler: shares of Oracle were down by more than 20% since the start of the year as of the close of trading Tuesday. Investors have viewed Oracle as “a poster child for AI Capex excess,” and it’s been stained by the “negative sentiment around OpenAI.” What traders were looking for was a sign that all that capex spending was turning into revenue now and even more revenue in the future, and much to shareholders’ relief, Oracle overdelivered... at least at first. The company didn’t offer a capex outlook for its next fiscal year. If management serves up an investment binge persistently larger than hoped for, the nascent faith traders have in the stock could be short-lived.

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It may be months away, but it feels like the countdown to Elon Musk’s SpaceX IPO is heating up. And for good reason: it’s not every day a company run by the world’s richest man goes public, and at a potential $1.75 trillion valuation (up from $1.25 trillion just a month earlier), it’s almost certain to be the biggest American company IPO ever, and if not the biggest, it will be the second-biggest IPO of all time.

Now some details are coming out about where the stock will list:

• Reuters reported that SpaceX is leaning toward listing on the Nasdaq, but there’s a catch: Musk reportedly wants a promise of early inclusion on the exchange’s Nasdaq 100 Index, which is what huge index ETFs like QQQ are based on.

• Typically companies have to wait up to a year before being considered for inclusion in indexes like the S&P 500 or the Nasdaq 100, but Nasdaq recently proposed a change that could decrease that wait time significantly for megacap companies.

• ​​Getting into a major index is almost always a boon for stocks — as the S&P 500’s newest members have seen. The inclusion sparks automatic buying from index funds, lifting demand and liquidity while expanding its investor base. 

• The listing would also be a major win for the Nasdaq, reinforcing its dominance in Big Tech IPOs and driving billions in index licensing and trading revenue.

Interestingly, whichever listing SpaceX goes with — NYSE is still in the running as well — the newest rebalancing of the S&P 500 means that index investors will soon have pre-IPO exposure to SpaceX through EchoStar, which will go into the index on March 23. EchoStar has struck deals for shares that would give it a roughly 2.8% stake in SpaceX, according to analysts. 

The Takeaway

Wherever and whenever the company opens its investor base, Elon Musk is likely to be the biggest winner, with his ~43% stake in the rocket company, which is also, let’s not forget, his social media and AI company after SpaceX hoovered up xAI. And we won’t be surprised if Musk manages to merge everything with Tesla as well.

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Google’s YouTube routinely crops up as the biggest thing on TVs, has emerged as the leading platform in the ever-expanding podosphere, and has steadily built an ad business that has (by itself) become almost Netflix-sized. But new data shows it’s actually the biggest media company in the world.

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• 📺 Warner Bros.: Don’t look now, but the consensus that Warner Bros. Discovery will ultimately get swallowed up by Paramount is still a tad shaky. As of February 26, markets were pricing in* a 91% chance that Paramount wins WBD; as of yesterday, that was down to 80%, which is still pretty high but, in light of the fact that Paramount has shed all of its post-bidding war gains, is not exactly a slam dunk. 

• 🚘 Tesla: With just a few weeks to go, prediction markets are coalescing around 330,000 to 340,000 Tesla deliveries in Q1, with the market implying a 63% chance there are at least 330,000 Teslas delivered this quarter and a 44% chance of more than 340,000. 

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.

• February CPI 

• Earnings expected from Campbell’s, Bumble, and Petco