Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.5%), and DJIA (+0.5%) are off their best levels of the session, but remain seated with solid gains.

Oracle (ORCL 178.02, -23.24, -11.55%) is pulling back sharply today following its Q4 (May) report last night, a disappointment after a gap higher on earnings last quarter. Oracle reported impressive EPS upside, but the revenue upside was more muted than in Q3. The Q1 (Aug) guidance was upside for EPS but just in-line for revenue. But probably the biggest disappointment was just reaffirming FY27 revenue guidance at $90 bln. With all the AI infrastructure builds, we think investors would have like to have seen a top line guidance range. Another concern was Oracle announcing that FY27 gross margin will take a step down due to timing for the ramp-up of its data center projects plus impacts from mix. While these investments are creating pressure on near term gross margins in its Infrastructure business, Oracle expects margin performance in Infrastructure to improve rapidly as it reaches full contractual revenue levels at its data centers.

Software names are under pressure as a result, with the iShares GS Software ETF down 1.7%.