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