CLOSING BELL
Ram Buyers Be Like
The market pulled back again Wednesday, and even overnight enthusiasm for Tesla was not enough to keep tech stocks from hitting the red.
It all started with a nasty report from Financial Times that Oracle’s favorite money bag supplier Blue Owl Capital, was not going to back its most recent project. It’s an upset for a $10B Michigan-based data center project, but in the grand scheme it’s just one of two dozen the tech giant needs to build to keep up with the tech giant Joneses.
After the bell, Micron posted some great forward looking guidance, painting a ‘memory super cycle’ of rising prices of computer memory. It looks like flush times for RAM makers, a classic supply and demand hurricane hitting AI accelerators and any poor sap that’s tried to build a gaming computer this holiday season.
Oh, and Tesla: the EV maker is suspended from selling cars in California if it does not follow a juges’s orders and fix its allegedly falsely advertised self driving.
The news wasn’t all bad, Fed’s Waller, fresh off a supposed interview with Trump, said he could see up to 100 basis points of cuts over the course of a steady pace in the coming year toward his ideal neutral interest rate. CPI data from during the shutdown drops tomorrow; even if it’s weird shutdown data, the S&P 500 has moved ±1% in the past 12 reports.
In the House, Congress moved to actually talk about health care after four Republicans broke with the Speaker of the House to join Democrats and force a vote on the House floor to send the problem to the Senate to figure out. It was either that or let millions of healthcare plans expire in two weeks.
Trump will address the nation tonight on TV, from the White House at 9 pm ET.
Looking for the heat map? Scroll on!
AFTER THE BELL
Micron Breaks the Piggy Bank After Hours
The market is undercutting AI earnings this quarter, as we all head into the new year. But after the bell Wednesday, Micron $MU ( ▼ 3.01% ) delivered a great quarter. Demand for its memory in the new year was sending the stock flying, proving that its plan to pivot away from consumer memory toward high-margin AI infrastructure is paying off.
Q1 Fiscal 2026 Results Snapshot
Adjusted EPS: $4.78 vs. $3.95 estimated (+167% YoY)
Adjusted Revenue: $13.64 Billionvs. $12.95B estimated (+56% YoY)
Operating Cash Flow: $8.41 Billion vs. $5.94B estimated
Adjusted Operating Income: $6.42 Billion vs. $5.37B estimated
While the Q1 beat was impressive, the Q2 guidance is what sent shockwaves through the market. Micron is projecting growth and profitability that Wall Street didn't think was possible until 2027.
Q2 Revenue Guidance: $18.3B – $19.1B (Wall Street was only looking for $14.38B)
Q2 EPS Guidance: $8.22 – $8.62(Nearly double the $4.71 consensus)
Q2 Gross Margin: 67% – 69%(Completely blowing away the 55.7% estimate)
Why the Numbers are Exploding
1. HBM3E Dominance: Micron’s High Bandwidth Memory is essential for AI accelerators like NVIDIA’s Blackwell chips. CEO Sanjay Mehrotra said that Micron’s HBM capacity for all of 2025 and most of 2026 is already sold out, pushing any other sales to the premium side.
2. The Data Center Shift: Data center revenue hit a new record as hyperscalers like Microsoft, Google, Meta aggressively build out AI clusters. This segment now carries much higher margins than the volatile PC and smartphone markets Micron used to rely on.
3. Strategic Exit from “Crucial”: The company’s recent decision to exit its consumer-facing Crucial business is flexing its forward guidance. By shifting that manufacturing capacity to high-margin AI server chips, Micron is capturing significantly more profit per wafer. Theoretically.
Investor Takeaway: Micron is pitching itself as a commodity stock no longer. Instead, it’s a high-margin AI play. With free cash flow reaching record levels and guidance coming in 80% above consensus, the “AI bear” case for semiconductors is getting harder to defend. At least tonight it is.
In other after hours moves, Insmed stock plunged 20% after its sinus drug failed mid-stage trial.
SECTOR NEWS
Oracle AI Expansion Hits Snag as Key Investor Pulls Back: Report
Oracle shares are falling $ORC ( ▼ 0.14% )after its largest finance partner, Blue Owl, will not back a $10B deal for yet another data center. $IREN ( ▼ 7.68% ) $CRWV ( ▼ 7.12% ) and $NBIS ( ▼ 6.79% ) were also falling, three smaller diversifying names in AI that offer computing and electrical power alternatives, getting battered by the less optimistic capital expenditures market.
Oracle is facing a critical bottleneck in its ambitious Project Stargate AI expansion after its primary funding partner, Blue Owl Capital, reportedly pulled out of a $10 billion data center deal in Saline Township, Michigan.
The withdrawal marks a significant shift in market sentiment as lenders grow wary of Oracle’s rapid, debt-fueled spending. Blue Owl had previously financed major projects in Texas and New Mexico, but negotiations for the Michigan based facility that was planned to power OpenAI thinking reportedly stalled over lease terms and Oracle's mounting leverage.
The debt dilemma: Oracle’s balance sheet is under intense scrutiny as it attempts to build hyperscaler infrastructure without a hyperscaler balance sheet. It’s been around the block, but it ain’t Google.
Debt Load: Total debt has surged to approximately $105 billion, up from $78 billion just a year ago.
Lease Commitments: Regulatory filings reveal that debt load is only going to increase. Long-term data center lease obligations have ballooned to $248 billion.
The Ratio: Oracle’s debt-to-equity ratio sits at a staggering 4.3, meaning the company carries $4 of debt for every $1 of equity. Compare that with swimming in cash trillionaires like Microsoft or Google.
The funding snag coincides with operational hurdles that are pushing back timelines for Sam Altman’s OpenAI vision. Completion dates for several OpenAI-linked data centers have been pushed from 2027 to 2028, citing labor and material shortages.
Oracle, for its part, disputed the report, claiming Blue Owl was simply “not selected” and that they are moving forward with a different equity partner to keep the project on schedule.
POPS & DROPS
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Bitcoin and Ethereum ETFs saw over $500 million in combined outflows.
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WHAT’S ON DECK
Tomorrow’s Top Things
Economic data: CPI (Inflation): Economists forecast November CPI at 3.1% year-over-year, slightly higher than the 3.0% previous reading and confirming that inflation remains stubbornly sticky.
Jobless Claims: Initial claims near 212K, signaling a labor market that remains resilient rather than "cooling" as the Fed intended.
Fed’s Balance Sheet: Markets are waiting for the 4:30 PM release to see how the Fed is managing liquidity after today’s mixed inflation and labor data.
Pre-Market Earnings: Accenture ACN, Darden Restaurants DRI
Post Market:
Nike $NKE ( ▼ 2.13% ) Investors are bracing for a double-digit revenue decline as the market waits to see if the new CEO can spark a holiday turnaround.
FedEx $FDX ( ▼ 0.09% ) As a global bellwether, all eyes are on whether FedEx can maintain its profit guidance amid shifting global shipping volumes.
KB Home $KBH ( ▼ 1.52% ) : After Lennar's rough start to the week, the focus is on whether KB Home is also sacrificing margins to keep its delivery numbers alive.