Microsoft partners with Oracle as Nvidia invests $26B

Key Takeaways

• Oracle's Remaining Performance Obligations (RPO) reached $553 billion, largely driven by new AI contracts.
• Oracle's stock surged 10-12% after exceeding revenue expectations, with total revenue reaching $17.2 billion and OCI revenue growing 42% due to AI demand.
• Oracle is investing billions in AI data center expansion and restructuring product teams, including job cuts and hiring freezes, citing AI efficiency.
• Oracle CEO Larry Ellison believes AI coding tools enhance productivity and position Oracle to disrupt, rather than be disrupted by, the "SaaS apocalypse."
• Nvidia plans to invest $26 billion over five years in open-weight AI models, releasing Nemotron 3 Super, which aims to outperform competitors like OpenAI's GPT-OSS on certain benchmarks.
• Insiders at Nvidia and Palantir Technologies sold a combined $9.65 billion in stock over two years, including a significant sale by Palantir director Peter Thiel.
• Applied Materials reports extremely strong demand for semiconductor manufacturing equipment for AI applications, leading to constrained capacity in leading-edge logic, DRAM, and advanced packaging.
• Marvell Technology, a key AI infrastructure player, projects its fiscal 2027 revenue near $11 billion and targets $15 billion for fiscal 2028, with data center revenue making up 74% of sales.
• Legal AI startup Legora acquired Walter with $550 million in new funding to expand AI tools for law firms, which integrate with Microsoft Word and Outlook.
• Oracle has formed a new partnership with Microsoft Azure to enhance its cloud solutions and AI offerings.

Oracle beats revenue estimates, shares rise on AI growth

Oracle exceeded revenue expectations for its third quarter, with shares rising as a result. The company's significant growth in Remaining Performance Obligations (RPO), reaching $553 billion, signals strong future contracted revenue, largely due to AI contracts. Oracle also raised its fiscal 2027 revenue forecast to $90 billion, reassuring investors about its AI investments. CEO Larry Ellison stated that AI coding tools help Oracle build new software efficiently, countering fears of disruption. The company reported $17.19 billion in total revenue for the quarter.

Oracle downsizes product teams due to AI efficiency

Oracle is restructuring its product development teams into smaller, more productive groups, citing the efficiency of AI code generation tools. The company announced quarterly revenue growth above expectations and an increased sales outlook for the next fiscal year. Oracle is investing billions in data center buildouts to support AI, though this has impacted free cash flow. Executives are planning job cuts and have frozen hiring in some areas. This move aims to reassure investors that AI enhances productivity and that Oracle can navigate the evolving software landscape.

Larry Ellison: AI's 'SaaS apocalypse' is real but won't harm Oracle

Oracle co-founder Larry Ellison believes the AI-driven 'SaaS apocalypse' is real, meaning AI could disrupt many software companies. However, he argues that Oracle's deep integration into business operations, compliance, and data management will protect it. Ellison stated that AI coding tools allow Oracle to build comprehensive software and automate complex systems, positioning Oracle as a disruptor rather than a victim. The company's cloud applications revenue rose 13% in the quarter, and investors responded positively, with shares increasing over 8%.

Oracle stock jumps 12% on strong earnings and AI revenue forecast

Oracle's stock surged 12% after reporting second-quarter earnings that surpassed analyst expectations. The company highlighted significant growth in its cloud services and license support, driven by high demand for its cloud infrastructure (OCI) for AI workloads. Oracle CEO Safra Catz stated they are aggressively expanding data center capacity to meet AI demand. The company provided an optimistic outlook for the third quarter, projecting revenue growth of 6% to 8%. Oracle Chairman Larry Ellison emphasized the unique position of their database technology and cloud infrastructure for AI development.

Oracle's cloud revenue surges with strong AI demand

Oracle shares rose nearly 10% following a strong fiscal third-quarter report showing accelerated cloud growth and increased AI infrastructure adoption. Total revenue reached $17.2 billion, up 22% year-over-year, with cloud services and license business revenue climbing 25%. Oracle Cloud Infrastructure (OCI) revenue grew 42%, driven by significant demand for AI workloads. CEO Safra Catz noted the rapid growth of OCI and ongoing data center expansion. A new partnership with Microsoft Azure aims to enhance Oracle's cloud solutions and AI offerings.

Applied Materials sees strong AI chip demand, tight capacity

Applied Materials CFO Brice Hill reported extremely strong demand for semiconductor manufacturing equipment used in AI applications. Leading-edge logic, DRAM, and advanced packaging capacity remain constrained. The company's foundry and logic segment, supplying equipment for cutting-edge chip production, saw a 14% revenue increase. This robust demand is attributed to the growing adoption of AI across industries like cloud computing, automotive, and healthcare. Applied Materials is working to expand its manufacturing capacity to meet this demand.

Oracle stock up 11% as AI demand counters 'SaaS apocalypse' fears

Oracle shares jumped 11% premarket after reporting stronger-than-expected results, with revenue climbing 18% to $17.19 billion and cloud revenue rising 41%. The company's executives dismissed fears of a 'SaaS apocalypse,' arguing that generative AI will strengthen software platforms by embedding AI agents into critical applications. These results eased investor concerns about AI disruption and the company's debt plans. Oracle's performance also boosted the IGV software ETF.

Marvell: A strong AI investment with significant growth potential

Marvell Technology is highlighted as a key player in AI infrastructure, with data center revenue making up 74% of its sales. The company's fiscal 2027 revenue outlook has been raised to nearly $11 billion, with a target of $15 billion for fiscal 2028, driven by organic growth. Strong demand in data centers, interconnects, and custom XPU is expected to surpass broader cloud capital expenditure trends. Marvell is recommended as a sturdy AI investment, with potential for tactical scaling during market downturns.

Nvidia and Palantir insiders sell billions in AI stock

Insiders at top AI companies Nvidia and Palantir Technologies have sold a combined $9.65 billion in stock over the past two years. Nvidia insiders sold approximately $3.98 billion, while Palantir insiders sold about $5.67 billion, including a recent large sale by director Peter Thiel. These sales occurred as artificial intelligence remains a dominant market theme, with Nvidia's market value soaring and Palantir's shares climbing significantly. Nvidia's success is driven by its data-center GPUs, while Palantir's platforms serve government and commercial clients.

Legora acquires Walter to expand AI legal tools

Legal AI startup Legora has acquired Canadian startup Walter to enhance its AI tools for law firms, marking Legora's first acquisition. With $550 million in new funding, Legora plans further acquisitions in the consolidating legal tech market. The companies did not disclose the transaction amount. Walter builds AI agents that perform multi-step tasks within existing legal software like Microsoft Word and Outlook. This move aims to accelerate Legora's vision for legal AI and integrate Walter's team and technology.

Supermicro partners with BlockchAIn for faster AI data centers

BlockchAIn LLC is collaborating with Supermicro to build AI data centers more quickly and affordably. The partnership integrates BlockchAIn's data center development with Supermicro's AI-optimized hardware. This collaboration aims to deliver an end-to-end AI infrastructure platform, enabling faster deployment of revenue-producing AI infrastructure. BlockchAIn LLC's operating platform generated approximately $22.9 million in revenue in 2024. They plan an AI data center expansion for activation in 2027.

Nvidia to invest $26 billion in open-weight AI models

Nvidia plans to invest $26 billion over the next five years to develop open-weight AI models, making their technology more accessible. The company released its most advanced open-weight AI model, Nemotron 3 Super, with 128 billion parameters, claiming it outperforms competitors like OpenAI's GPT-OSS on certain benchmarks. Nvidia sees this investment as crucial for supporting the AI ecosystem and potentially shaping competition between the US and China by offering a strong US-made alternative to open-weight Chinese models.

AI enhances software products, says portfolio manager

Matt Wittmer, a portfolio manager at Allspring Global Investments, discussed the artificial intelligence market and the recent downturn in software stocks. He believes that AI has the potential to significantly enhance software products. Wittmer shared his insights on 'The Claman Countdown,' addressing the current state and future prospects of AI within the software industry.

Sources

• Oracle beats quarterly revenue estimates, shares rise
• Oracle Will Downsize Its Product Teams Because Of AI
• Larry Ellison says the AI ’SaaS-apocalypse’ is real — but won't hurt Oracle
• Oracle stock soars 12% after earnings beat, big AI revenue forecast
• Oracle capitalizes on AI demand with record Cloud dollar adds
• Applied Materials CFO: AI Chip Demand “Extremely Strong” as Leading-Edge Capacity Stays Tight
• ORCL jumps 11% premarket as earnings challenge 'SaaS apocalypse' fears
• Marvell: A Sturdy AI Investment Worth A Large Position
• These 2 Top AI Stocks See $9.65 Billion Insider Selling
• Legora lands its first acquisition, and the great legal AI rollup continues
• Supermicro backs BlockchAIn push to build AI data centers faster, cheaper
• Nvidia Will Spend $26 Billion to Build Open-Weight AI Models, Filings Show
• AI has the ability to enhance software products, portfolio manager says