Oracle Has Indexes Flying High — But for How Long?
Data centers and chips remain hot, but the strength is narrowing. Here's what that — and incoming economic data — could mean for the market.
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Larry Ellison is now the wealthiest person in the world, with his net worth approaching $400 billion, following a 38% surge in Oracle ORCL — a company he co-founded. Oracle’s earnings report didn’t produce a big beat, but the bookings far surpassed expectations, with the cloud business growing 500%.
The giant guidance shocked even the AI optimists and is lifting semiconductor and data center groups. Oracle expects $35 billion in capital investment in the May 2026 fiscal year.
Data Centers continue to be one of the hottest groups in the market. Nebius Group NBIS is trading higher after announcing an offering, IREN Ltd. IREN is hitting a new all-time high, and TerraWulf WULF is breaking. I reduced a little IREN, but I am continuing to ride the momentum in the group.
Economic Indicators
The producer price index report reflected an unexpected fall in wholesale prices in August. That gives an added boost to bets that the Federal Reserve will cut interest rates next week, with investors now focused on tomorrow’s consumer price index for the final confirmation.
While a soft PPI report is a good sign that inflation is cooling, it may not be such a good sign for economic growth. The market is still operating with the narrative that weak economic data is positive, because it means a more dovish Fed, but at some point, the economic slowing is not going to be such a wonderful development.
There are some signs that the market has already discounted lower rates, but the Oracle move today is providing fuel for the AI group, and that is good for the indexes. Breadth is running 3,000 gainers to 2,400 losers, but the number of new highs is contracting and is under 200 so far. The market action is narrower, and upside progress is becoming more difficult.
I’ve been digging deep for some new entries, but don’t see many setups that I like right now. The reaction to the consumer price index on Thursday should be quite instructive as it will be the final confirmation of a rate cut. Will the market run even higher on news that it is already anticipating?
At the time of publication, DePorre was long NBIS, IREN, WULF.
