Before the Bell: The Oracle miracle

AI keeps surging ahead, but few can keep up. Zara and Alstom each gain 6.8%.

Wall Street inched further into record territory on Wednesday. The S&P 500 rose 0.3%, while the Nasdaq eked out another all-time high with a mere 0.03% gain. All eyes were on Oracle (+36%), which leapt like a carp—a rare move for a company with a market capitalization of 922 billion dollar, closing in on the 1 trillion dollar mark. Oracle is now the 11th largest company in the S&P 500. According to The Wall Street Journal, the massive surge in Oracle’s order book largely stems from a 300 billion dollar contract with OpenAI, starting in 2027 and running for five years. It may be heresy in the AI temple, but what if OpenAI is bankrupt by then—or, less dramatically, simply needs far less computing power than expected? Even as the rally narrows, AI chip leaders Nvidia (+3.8%) and Broadcom (+9.8%) continue to surge. Swedish fintech Klarna jumped 14.5% on its first trading day in New York. In Europe, Zara gained 6.8% after strong August sales. It is now official: WDP will join the AEX index. The stock fell 3%—classic “sell on the news.”

In Asia, Chinese markets opened with solid gains of over 1%, while Hong Kong slipped 0.5%. Tokyo rose 1%. In Europe, the ECB meets today, but all eyes are on U.S. inflation figures out before the bell. Economists expect August inflation at 2.7% and core inflation at 3.1%. Will this trigger another “sell on the news”?

Alstom (+6.8%) leads in Europe

It’s not just AI and cloud players landing billion-dollar deals. French train manufacturer Alstom also continues to secure large contracts. The latest: a 1 billion euro order from New Jersey Transit to replace 40-year-old rolling stock. Alstom will supply 12 locomotives and 200 cars. One analyst notes that investors expected 5.5 billion euro in new orders this quarter, but the company has already booked enough to exceed that. The U.S. order comes despite hefty import tariffs on metals of up to 50%. No problem for Alstom—it operates production sites near New York and in Pennsylvania.

Dividend investors thank TINC

Belgian infrastructure investor TINC rose 2% yesterday after, as usual, reporting solid half-year results. Net profit was 18.4 million euro, or 0.50 euro per share. Known as a reliable income stock, TINC also aims for accelerated growth: in June it raised 113 million euro in new capital. Its portfolio of public, energy, and digital infrastructure projects delivered an annualized return of 9.6% in the first half. The portfolio has nearly doubled since June 2021 to 650 million euro (net 615 million euro), equal to 12.69 euro per share. At a share price of 10.26 euro, TINC trades at a 19.2% discount. The dividend yield is 5.7%.

Did you know…

that Morgan Stanley downgraded chemical distributor Azelis (-3.9%) from buy to hold? The target price was cut from 19 euro to 17.5 euro. With the stock trading at 11.93 euro, the new target still implies 46% upside—but the analyst no longer considers it a buy.

This article was translated from Dutch and was originally published on Spaarvarkens.be.