News and analysis

Oracle Corporation (ORCL) lives up to its name meaning the great ability to foresee global trends of the future. Just like a renowned ancient Greek oracle of Delphi with its priestess Pythia, who used to choose the best option of what to do in the face of uncertainty, this Oracle of Austin, Texas, made a timely bet on developing cloud computing software, which now perfectly fits to creation and scaling of data centers both in the U.S. and abroad. And now when Oracle became a pillar of a $500 billion cost data centres infrastructure project Stargate, in conjunction with ChatGPT-maker OpenAI and Japan’s SoftBank, which we already described three months ago, Oracle has already begun to reap a lot of financial benefits. Not only fate and global tailwinds, but also the current Republican administration of the U.S. favours this project, sparing no effort to support it, as they are considering the growing AI infrastructure as the next oil of the world's economy.

Power-hungry data center demand, which provides computing power for artificial intelligence and the crypto industry is pushing national power use to record highs, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook this month. It projected power demand to rise to 4,193 billion kilowatt hours (kWh) in 2025 and 4,283 billion kWh in 2026 from a current record of 4,097 billion kWh in 2024.

Not in some distant future, but here and now, Oracle market value gained as much as 22% during the last three trading sessions on Wall Street, jumping from a $175+ area to its highest ever weekly close above $215 per share last Friday. This happened on the wings of all-time records in its earnings report. On the night of June 11-12, the company's revenue for the quarter ended May 31 climbed to $15.90 billion to beat even a very optimistic analyst pool’s average estimate of $15.59 billion. It is especially remarkable that the sales number at Oracle’s largest unit, which is related to cloud services and license support, came out at $11.70 billion, bringing another 14% increase YoY. On this basis, Oracle earned $1.70 per share, compared with consensus expectations of $1.64, with $1.67 per share being its previous best achievement from March to May 2023.

But it is not only what has already been achieved that attracts the attention of the investing crowd. It was not the Pythia but Oracle's CEO Safra Catz who said on a post-earnings call that her company projected its total revenue to be at least $67 billion for fiscal 2026, raised her own previous annual revenue forecast due to robust demand for Oracle's cloud offerings from companies deploying artificial intelligence (AI) agenda. The Greek oracle was consulted on a wide range of matters, from personal issues to affairs of business and state, and the Pythia's pronouncements were influential throughout the entire ancient world. In nearly the same way, the AI is now the major adviser in which countless marketing departments of giant, medium and small companies see a panacea for multiplying the sales of their products and services while reducing the costs of these purposes. Oracle's annual sales are expected to rise by around 16.7%, compared with its prior official projection of a 15% growth, according to Safra Catz, as she expected Oracle's total cloud growth rate (applications plus infrastructure) could increase from 24% in fiscal year 2025 to over 40% in fiscal year 2026.

We had been targeting above $200 for the stock since the first half of March, following the financials at that time. Now, in mid-June, that target is overshot, thanks to the very latest quarterly report. Investors wishing to fix profits are free to do so, as the speed of the recent price jump for Oracle substantially exceeds the usual market standards. Some cooling pullback from levels above $215 to $200 or even slightly lower cannot be ruled out in the short-term, but medium-term targets now seemingly need to be shifted to at least $250, and this could be achieved within the coming months of 2025, rather than next year.

Adobe Systems (ADBE) is perhaps the best proof that not every big business that releases AI updates, and even its cutting-edge AI features, thrives immediately. Issues of its know-hows' monetization now come to the fore, and the creator of Illustrator, Reader, Acrobat and other popular software for computer graphics, photography, books' illustration, animation, multimedia/video, motion pictures etc still shows the lack of confidence in terms of its financial performance in the coming months.

The future may be bright, but the present condition of the stock's sentiment is still unclear. Adobe's market value just lost $22 per share (about 5.3%) once again on June 13 in response to its quarterly earnings release, after the stock had recently performed a 25% bounce off its annual low around $332 of early April to reach a local high at $422 on May 21, with its double retest in early June. Another slide below $400, and even below $385 at some point intraday, has not been avoided soon after the disappointing news, although a partial recovery of about 2.5% this Monday helped to touch $405 and close the session at $401.73. From a purely technical point of view, there is no clear reversal pattern for the bulls yet, but a 28% discount compared to the price at the beginning of the year could attract demand step by step.

Adobe reported some better-than-expected results for Q2, with its sales achieving $5.87 billion to bring +11% YoY. Earnings per share (EPS) came out at $5.06, also surpassing consensus estimates at $4.97. The company’s Digital Media segment with its major products like Creative Cloud and Document Cloud, added 11% YoY, while the Digital Experience segment saw a 10% pace. Markets are probably interested in substantially higher momentum in both Adobe’s current, and especially future, performance, as investors used to compare this pace with much faster pace when they are looking up more than 50% for some AI leaders.

Adobe has provided a lot of free or low-cost access to its new AI-featured products, but it still has $0.25 billion only in AI Direct Annual Recurring Revenue (ARR), which is commonly used as a financial metric to represent predictable, recurring sales numbers which a subscription-based business expects to earn from its customers. It may characterise Adobe's low stability in its immediate growth potential from self-repeating revenue streams. Adobe CEOs discussed AI's role in merging creativity and productivity, trying to focus on the company's "unique" positioning "in unified workflow", which is true, of course, but they still projected a revenue target around $23.5 billion and EPS between $20.5 and $20.7 for 2025, which may be not enough in the market's eyes in terms of financial return at the moment.

However, the market may quickly change its mind, as it recently did with chipmaker Advanced Micro Devices (AMD), as a good example. It had been lagging for months but has gained almost 10% sharply since the start of this week in response to some investment houses revising their price targets. Something similar could happen to Adobe stock if a critical mass of target revisions accumulates systematically.

For starters, Bernstein SocGen group is among the first ones who freshly raised its price target on Adobe to $530.00 from $525.00 soon after the weekend, while also maintaining its Outperform rating on Adobe's shares. It cited Adobe’s "potential to deliver approximately 10% revenue growth in the near term", with possible acceleration could be driven by its AI and "changes in go-to-market" strategy. Bernstein described Adobe as a "show me story" that has evolved into an "explain to me and show me story", while saying that noting that limited disclosure around business metrics make it difficult for experts to model Adobe's future growth trajectory, awaiting "more clarity around AI monetization" and new go-to-market initiatives and admitting some "near-term growth uncertainties".

Ripple (XRP) is rising by 2% to $2.2000 on Monday, matching Bitcoin (BTC), which is also up 2% to $106,939. Most cryptocurrencies have been in decline since Thursday, when Israel launched its first strike against Iran. Oil prices surged 11%, while risky assets, including the S&P 500, dropped — with the index falling 1.8% on Friday. Bitcoin declined by 5.2% to $102,612, and Ripple fell 8.2% to $2.0810.

As the Middle East conflict appears to have paused on Monday, hopes for a potential de-escalation are helping crypto markets recover. Enthusiasm around a possible approval of a spot XRP-ETF by the U.S. Securities and Exchange Commission — with market confidence at around 90% — is also supporting sentiment. However, geopolitical tensions are dampening the impact of this positive news.

If XRP breaks through the $2.500 level, a strong acceleration to the upside is likely. This remains a plausible scenario that could play out in the near term if broader conditions stabilize.

Shiba Inu (SHIB) is adding 4.5% to $0.0000132 this week, outperforming the broader crypto market where Bitcoin (BTC) is up 2.8% to $109,224. Still, SHIB remains at extremely low price levels, underlining its relative weakness despite generally positive market sentiment. Even a 4.5% gain appears insufficient in this context.

The project has produced several positive developments, including a collaboration with the United Arab Emirates and a growing number of Shiba Inu wallets. Yet, there’s been no meaningful price momentum. After falling to $0.0000100 in April, SHIB rebounded 72% to $0.0000175 but failed to break through the key resistance at $0.0000200. Since then, it has pulled back to $0.0000119.

Even optimistic messaging from the project’s marketing team has done little to lift the mood. The price remains in a sideways to bearish structure. Until SHIB decisively breaks above the $0.0000200 resistance level, other assets may offer better opportunities for upside.