Oracle Saves The “Magnificent Seven”

Oracle’s (NASDAQ: ORCL | ORCL Price Prediction) earnings showed that it was not overextended, that it’s a huge bet on the future of data centers, and its AI revenue was not a long shot. The drop in the “Magnificent Seven” was largely related to these anxieties. The market can put the question of whether the bets on AI, its expensive data centers, and its ability to generate revenue were a gamble worth taking

Oracle not only delivered on earnings. It even said they would get better.

Oracle’s stock was pounded into dust. Against a 52-week high of $345.72, it dropped to $118.86. With a rally after earnings, the stock hit $164, up 10%

The secret words that changed the market’s perception. “For fiscal year 2027, we are raising total revenue guidance to $90 billion.” Many skeptics thought the call would go the other way

Oracle’s earnings beat. Revenue rose 22% to $17.2 billion. EPS was up from $1.05 to $1.29.

“Demand for AI and advanced computing will continue to expand broadly across the economy,” co-Chief Executive Clay Magouyrk said Tuesday on a call with analysts

Another concern across the sector was whether companies could raise the capital for the boom in data centers. In February, Oracle announced plans to raise $45 billion to $50 billion in the fiscal year to expand its cloud infrastructure capacity. The company said that, within days, it had commitments for $30 billion

Data center obligations across the Magnificent Seven have to be close to $500 billion for the calendar year. Pessimists said the industry was out over its skis. Some proof of that was not true was the revenue Nvidia (NASDAQ: NVDA) produced last quarter. As the arms merchant to the industry this was good news.

The Magnificent Seven have had a horrible year. As of last week, none had outperformed the S&P 500 this year. MarketWise wrote, “Investors Are Losing Patience as the ‘Magnificent Seven’ Keep Spending on AI.

Oracle showed the troubled AI narrative is not true.