CONCLUDED Stock Market News From Oct. 29, 2025: Stocks and Bonds Take a Hit Last Updated: 10 hours ago Big Tech Earnings on Tap Later Today: Alphabet, Microsoft, and Meta Big Tech earnings officially kick off today, with Google parent Alphabet, Facebook owner Meta Platforms, and Microsoft reporting results after the market closes today. Subscribe to Barron's Tools Customer Service Customer Center Network Here's a recap of what to expect from each one: Cryptocurrencies Data Magazine Markets Stock Picks Barro ...

Core Insights - Microsoft is expected to report earnings on Wednesday, with analysts anticipating further acceleration in its cloud business and significant benefits from a Windows refresh cycle [1] Group 1: Cloud Business - Analysts see potential for further acceleration in Microsoft's cloud business, indicating strong growth prospects in this segment [1] Group 2: Windows Refresh Cycle - The company is expected to gain major benefits from a Windows refresh cycle, which could positively impact its overall performance [1]

Core Insights - Microsoft's monopolies in Office and Windows provide a significant financial advantage over other major AI investors [1] - The company's cloud business is performing strongly, contributing to its overall financial health [1] Group 1 - The dominance in Office and Windows allows Microsoft to leverage its financial resources more effectively than competitors in the AI space [1] - The robust performance of the cloud business indicates a healthy growth trajectory for Microsoft, enhancing its competitive position [1]

Core Viewpoint - Morgan Stanley has raised its price target on Microsoft due to the strength in its cloud business and positioning in the AI sector, increasing the target from $582 to $625 per share, indicating an 18.9% upside from current levels [1] Company Summary - The investment bank maintains an "overweight" rating on Microsoft stock, reflecting confidence in the company's growth potential [1]

Core Viewpoint - Oracle Corp. is forecasting significant growth in its cloud business for the coming years, indicating a sustained interest in artificial intelligence, which is positively impacting semiconductor stocks [1] Company Summary - Oracle Corp. is experiencing optimism regarding its cloud business growth, which is seen as a reflection of the ongoing enthusiasm for artificial intelligence [1] Industry Summary - The excitement surrounding Oracle's predictions is contributing to a rise in semiconductor stocks, suggesting a broader market confidence in technology sectors linked to AI [1]

Company Overview - Oracle shares surged over 35% following the company's projection of significant revenue growth driven by artificial intelligence contracts [1][4] - CEO Safra Catz described the recent quarter as "astonishing," highlighting the signing of four multi-billion-dollar contracts with three different customers [1][4] Financial Projections - Oracle's cloud business revenues are projected to grow by 77% in the current fiscal year, reaching $18 billion [4] - Future revenue expectations include $32 billion, $73 billion, $114 billion, and $144 billion in subsequent years [4] - The company anticipates signing additional multi-billion-dollar contracts in the coming months [4] Market Impact - The surge in Oracle's stock price contributed to a rise in the S&P 500 index, which increased by 0.5% to 6,545.94, further pushing the index into record territory [2] - The Dow Jones Industrial Average experienced a slight decline of 0.1% to 45,659.71, while the Nasdaq Composite Index rose by 0.3% to 21,950.81 [2] Economic Context - The overall market is reacting positively to expectations of a potential Federal Reserve interest rate cut, influenced by signs of a weakening US employment market [3] - A surprise 0.1% decline in the producer price index in August reinforced these expectations [3] - AI-related investments have been a significant driver of equity market strength in 2025 [3]

Core Insights - Oracle's shares have surged due to strong demand for AI, with expectations that its core cloud business revenue will exceed $500 billion [1] - Despite a quarterly earnings miss, Oracle's guidance has impressed analysts and investors, indicating a robust outlook for AI spending and the broader ecosystem [2][5] Company Performance - Oracle is emerging as a key hyperscaler with a competitive advantage in cost and performance, attributed to its clean sheet approach and advanced networking technology [3] - The company is significantly investing in AI-oriented software, positioning itself competitively within the AI market [4] Market Dynamics - The current investment cycle is suppressing Oracle's free cash flow, but the potential for growth in AI is seen as greater than previous cloud opportunities [6] - Analysts suggest that Oracle's misunderstood growth potential is now being recognized, as the market increasingly values cloud growth similar to other tech giants like Microsoft and Amazon [8] Future Outlook - The market is optimistic about Oracle's sustainability and growth potential in 2026 and 2027, with expectations that the overall market for AI and cloud services is larger than previously estimated [9] - The competitive landscape for AI and cloud computing remains strong, with multiple companies, including Nvidia and AMD, benefiting from the expanding market [10][11]

Core Insights - Larry Ellison, co-founder of Oracle, has seen his net worth increase by $70 billion in one day due to Oracle's strong outlook for its cloud business, positioning him as a contender for the title of the world's richest person [1][2] - Ellison's net worth has reached $364 billion, bringing him close to Elon Musk's $384 billion, according to the Bloomberg Billionaires Index [2] - If Ellison's gains hold when trading begins, it will mark the largest one-day increase ever recorded by the index [3] Company Insights - Oracle Corp. has delivered an aggressive outlook for its cloud business, which has significantly impacted its stock price and Ellison's net worth [1][2] - Ellison serves as chairman and chief technology officer of Oracle, indicating his pivotal role in the company's strategic direction and performance [2] Industry Insights - The competition for the title of the world's richest person highlights the volatility and rapid changes in wealth within the tech industry, particularly among leaders in cloud computing and software [1][3] - The significant one-day increase in Ellison's wealth underscores the potential for substantial financial shifts based on company performance and market reactions [3]

Cloud Business Performance - Amazon's cloud business needs to deliver stronger growth [1]

Core Viewpoint - Oracle's stock price pullback presents a buying opportunity, trading at a discount relative to its peers and growth outlook, with a potential upside of 20% to 250% over the next decade [1][6]. Group 1: Stock Valuation and Growth Potential - Oracle's current P/E ratio is 37.26, which appears high compared to other software companies, but its growth trajectory justifies a higher multiple [2][5]. - The company is expected to achieve a revenue CAGR in the low teens through 2034, with earnings projected to grow at a higher rate, leading to a forward P/E of 12x in 2030 and 7x by 2034 [5][6]. - Analysts forecast a 12-month stock price target of $179.20, indicating a 17.59% upside from the current price of $152.40 [10]. Group 2: Market Position and Competitive Advantage - Oracle's cloud business, while only 2% of the global market, is growing rapidly and is expected to maintain high double-digit growth rates through 2026 [4]. - The company has established significant partnerships with major players like Amazon, Microsoft, and Alphabet, giving it a substantial data center footprint [4]. Group 3: Dividend and Financial Health - Oracle's dividend is competitive with the S&P 500 average and is expected to grow at an above-average pace due to a low payout ratio of less than 35% of its 2025 earnings forecast [7][8]. - The company's balance sheet shows decreasing debt levels, supported by improved cash flow from AI investments, allowing for sustained dividend growth [8]. Group 4: Technical Analysis and Market Sentiment - Technical indicators suggest that Oracle's stock has hit a bottom and is poised for a rebound, with support near the $150 level and potential resistance at $160 [11]. - Recent analyst upgrades from Sell to Neutral have improved market sentiment, reducing the number of Sell ratings to zero [10].