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Welcome!
We hope you had a great weekend and that the first week of September has started off well for you. As we move into this week, it’s worth noting that the earnings calendar is a little lighter this week in terms of major companies. In this week’s update, we are going to highlight two stocks and give an analysis if we think they are a potential buying opportunity.
Weekly Earnings Spotlight: September 8-12th, 2025
Tuesday September 9th: ORCL (Oracle Corp), SNPS (Synopsys)
Wednesday September 10th: CHWY (Chewy)
Thursday September 11th: ADBE (Adobe), KR (Kroger)
Oracle Corporation:
Recent Highlights
Oracle is set to release earnings for Q1 fiscal 2026 on Tuesday, September 9, after market close. Many analysts are calling Oracle a top stock pick thanks to their continued growing presence in AI infrastructure and competitive GPU clusters. For us, the key area of our focus is Oracle’s cloud strength, which just like salesforce (if you were to read our analysis last week) is the backbone of their growth journey.
In Q1 of 2025 total revenue was $13.3 billion, which is a 8% increase year over year while their cloud revenue (IaaS and SaaS) grew 22% to 5.6 billion. Cloud consumption was impressive with revenue rising by 53% year over year. Oracle continues to expand to other countries like Germany and Netherlands which was a $3 billion investment in data centers. They also recently partnered with Google Cloud to offer access to Gemini AI models. However the biggest piece and most notable is that Oracle secured a $30 billion annual cloud deal with OpenAI.
Investment Thesis
We love Oracle and believe that it is a standout pick in the AI and cloud infrastructure space. It has the position as “fourth AI hyperscaler” which in our opinion is well earned. We see Oracle continue to have strong cloud and AI growth, with strategic expansion across global markets.
As we said before our biggest takeaway on this stock is the $30 billion annual cloud deal with OpenAI - yes annual. That is huge news as this is a continuous revenue stream and as OpenAI continues to get bigger, we would make the assumption that they partner together on more things. This contract is part of a broader Stargate initiative, with a multiyear project aimed at building some of the largest AI data centers in the world. This agreement positions Oracle as an important partner in supplying the infrastructure needed to power OpenAI’s next generation models, which increases demand for Oracle’s cloud and GPU capacity. Oracle is now competing head on with companies like Microsoft, Amazon and Google in the AI race.
We hold a small position in Oracle right now and will continue to buy before earnings release if stock stays around current price of $230. Many analysts that we follow see much higher returns in the long term as we continue to say that AI is the future. It is important to invest broadly and when it comes to AI and this stock in our opinion is a good long term option with the current market cap sitting around 650 billion. We think the market cap will only continue to climb along with the stock.
Adobe:
Recent Highlights
Adobe will release earnings for Q3 2025 on Thursday, September 11th. Analysts are looking for EPS around $5.18 and revenue of $5.9-5.92 billion which would be around a 10% year over year growth. They are expected to have $23 billion in revenue for the full year. We like and have used most of their products like Creative Cloud, Document Cloud, and Acrobat solutions. As you can see above Adobe has a LOT of different products. Adobe released a product in 2023 called Firefly, which generates AI models and pictures for someone. Adobe growth recently has been tied to their AI progression and Firefly is a big part of this. Firefly is integrated into Photoshop, Illustrator, Acrobat AI Assistant. While we have not used this product we view this as a highly competitive market. Grok, Chat GPT, and Canva are getting better at creating AI pictures and having different tools related to AI and we think those over time may be used more than Adobe. Adobe is down 20% YTD, which shows what we believe in the skepticism around if AI will drive their revenue in the future as much as they believe it will. Their Digital Media ARR growth has declined compared to prior years and investors worry about how much Firefly will produce. In their previous quarter Adobe’s management has tried to emphasize how well their subscription base model is and that people are willing to pay for it. It will just take time to see this or not.
Investment Thesis
We remain very cautious on Adobe heading into earnings, as we continue to view the company as carrying a fair amount of long term risk. While our jobs and many jobs use the Adobe product for many different uses, we remain skeptical that in the long term it will continue to be this way. We know that Adobe has long considered to be a staple brand with many different jobs but do question how much more growth they can have going forward. We do like their aggressive stance on inserting AI into all their products and will be curious to see how much more they will project these products to generate this quarter.
We do not own any Adobe going into earnings, but will keep an eye on whether their guidance gets revised upward particularly in the AI adoption and FIrefly’s contribution. Last quarter management addressed the competitive nature and we will be listening to how they are going to approach that. Our biggest concern is their competition like Canva, Figma, and many other AI start ups offering similar tools that we think will outpace Adobe products for a much cheaper cost. We think that many customers will move away from Adobe because of their subscription based model and use cheaper similar products.
As always thanks for reading, and we hope you have a great start to your week.
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