Why C3.ai, Oracle, and NuScale Power Stocks Are Moving on Monday

Core Viewpoint - The recent report from TD Cowen has significantly impacted AI-related stocks, particularly C3.ai and NuScale Power, while also affecting Oracle's stock performance [1][2]. Group 1: Microsoft and Data Center Leases - Microsoft has canceled several hundred megawatts (MW) worth of data center leases in the U.S. and is pulling back on new projects due to construction delays and power access issues [3][4]. - Microsoft was the most active lessee of data center capacity in 2023 and early 2024, planning to invest $80 billion in data centers by 2025, but is now reconsidering its data center needs [5]. - CEO Satya Nadella indicated that AI infrastructure may be heading toward overcapacity, prompting Microsoft to prefer leasing data centers instead of owning them [5]. Group 2: Impact on C3.ai and NuScale Power - The reduction in Microsoft's data center capacity needs suggests a decreased demand for nuclear energy, which could negatively affect NuScale's business [6][7]. - A decline in Microsoft's enthusiasm for AI services is likely contributing to the drop in C3.ai's stock price [7]. Group 3: Oracle's Position - Despite the negative implications for AI demand from Microsoft, Oracle may benefit if it is set to provide data center services to OpenAI, potentially reducing Microsoft's need for its own data centers [8]. - The current valuation of Oracle at 41 times earnings and nearly 9 times trailing sales raises concerns, but the TD Cowen report does not provide additional reasons to sell Oracle stock [9].