Market Prep: Earnings & Rotation flow
$ORCL $GOOGL $VRT $ADBE
Hello Traders,
It’s a high-stakes Tuesday. As the market braces for Oracle’s results and Wednesday’s inflation numbers, we’re cutting through the noise. Also today, we are analysing the ADBE setup and revealing our top tactical picks for what is shaping up to be the most volatile week of the month.
Let’s begin with ORCL 0.00%↑ ORACLE CORPORATION
The Bull Case: If Oracle shows that they can turn the backlog into actual revenue faster than expected, the stock could easily gap up.
The Bear Case: High debt (~$100B) and aggressive spending ($15B+ CapEx) put pressure on margins.
Expected Q3 Guidance
Revenue: Street expects $16.91 billion (+19.5% YoY).
EPS: Consensus is $1.70.
Guidance to watch: Management previously guided for Cloud Revenue growth of 37-41%. Anything lower will be a disappointment. Look for updates on their $50 billion fundraising plan for AI capacity.
Ahead of tonight’s earnings, Oracle's market setup is looking pretty nervous. Even though there are plenty of bets on a big rally (calls), they’re being cancelled out by a massive wave of insurance (puts) that are already in the money. We are seeing a big jump into people betting on a drop down to $140, demonstrating that traders are terrified of a 'sell the news' event despite the AI growth.
ADBE 0.00%↑ ADOBE INC.
The Bull Case: At 15x earnings, the “AI death” is already priced in. Any sign that Firefly is actually driving new subscriptions (ARR) could trigger a massive relief rally.
The Bear Case: Major firms like Goldman Sachs are skeptical, worrying that free AI tools are eroding Adobe’s moat.
Expected Q1 Guidance
Revenue: Management guidance $6.25 – $6.30 billion (+10% YoY).
EPS: Street is looking for $5.85 – $5.90.
Guidance to watch: The focus is entirely on Net New Digital Media ARR. Adobe needs to show that AI is a “tailwind” that makes people pay more, not a “headwind” that makes their software obsolete.
Adobe's stock is currently caught in a tug-of-war. Even though earnings are coming up this Thursday, the options market is looking unusually calm. There’s a huge concentration of bets right at the $300 level, which is creating 'positive gamma.' This basically acts like a shock absorber, where market makers actually help keep the price steady. Expect the stock to 'pin' or hover in its current range as we approach the announcement.
Now the best two picks for the week:
