ORCL & ADBE earnings next week – here’s why I’m loading calls on Oracle (and why Adobe is a coin flip)
ORACLE – Bullish
Wall Street expects $1.96 EPS and $19.1B revenue (+20% YoY). Oracle has beaten consensus every single quarter for the last four, including a 6.7% EPS surprise last quarter. Management guides conservative, analysts model to guidance, Oracle prints above. Been clockwork.
The actual bull case: OCI grew +84% YoY last quarter to $4.9B. Multi-cloud database revenue +531%. AI infra +243%. Oracle has $553B in Remaining Performance Obligations – signed contracts, not pipeline estimates, up +325% YoY. Larry Ellison said they can’t build data centers fast enough to fulfill demand and the backlog backs that up.
The anchor tenants are OpenAI (primary cloud partner for the $500B Stargate project) and TikTok US (15% equity stake, existing cloud provider relationship). The biggest bear case was financing – Oracle already raised ~$30B toward a $50B target and management confirmed most large AI contracts require minimal incremental capital from Oracle itself. FUD addressed.
Buying some 235$ calls.
ADOBE – Coin flip
Fundamentals are fine. EPS consensus ~$5.83, revenue $6.43-6.48B, plus inorganic boost from Semrush closing April 28. Four straight beats. Trades at 11x forward earnings with 89% gross margins. Objectively cheap.
Problem is the sentiment is broken. Q1 they beat on both lines and the stock dropped 7.6% because CEO Narayen announced he’s leaving after 18 years with no named successor. That overhang hasn’t cleared. Options market pricing ±9.47% move – a clean rally and a “good numbers bad vibes” dump are both equally realistic.