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We haven’t had much of a summer lull, let’s face it, what with the relentless pace of AI-related deal news, not to mention earnings. Nevertheless, the end of summer vacation changes the pace a bit this week, when we’ve got both Apple’s annual iPhone event and earnings announcements from Oracle and Adobe. And we’re also on the lookout for Anthropic’s IPO filing, which seems likely to come sometime in the next few weeks.
Leaving aside Anthropic—whose timing is highly uncertain—Oracle’s earnings announcement should be the most interesting scheduled news event of the week. Yes, Apple fans will get all worked up about the foldable iPhone expected to be unveiled on Wednesday, when new CEO John Ternus takes the stage. (Bloomberg had a nice rundown on Friday). But that’s mostly marketing. Oracle’s numbers—due out on Thursday—will give us a much-needed update on how Larry Ellison’s costly adventures in AI data centers are going.
Investor sentiment around Oracle is not exactly upbeat right now, reflecting anxieties about the company’s big spending to build out new data centers and how that’s affecting its debt levels and cash flows. Indeed, in July S&P downgraded Oracle’s credit rating, citing in part its reliance on OpenAI as a customer. It also cited Oracle’s expected capital expenditures forecast for this fiscal year, which is expected to lift its cash burn sharply. Analysts estimate Oracle will burn $48 billion this fiscal year, double the amount for the year ending in May, according to S&P Global Market Intelligence. And while Oracle stock has bounced off its lows of late July, it is down 19% for the year so far.
Still, fiscal 2027, which began in June, is also when Oracle’s revenue growth is expected to accelerate sharply, as revenue from new AI compute rental deals begins to flow. Oracle has projected top-line growth of about 28% for the first quarter—compared with 21% in the May quarter—accelerating to 34% for the full year. Investors will likely focus on whether the growth rates are getting any upward revision, and whether the costs of the data center expansion are also rising.
Adobe in the Spotlight
We’ve also got Adobe reporting earnings on Thursday. This will be a noteworthy call, given that the enterprise software firm last week named the successor to Shantanu Narayen, who has been the man in charge since 2007.
Starting in December, Adobe will be run by Anil Chakravarthy, who has been leading Adobe’s digital experiences business—which includes data analytics and marketing services— for the past few years, although he got a title change in January when Adobe revamped its org chart. While Narayen is still in charge, we may hear from Chakravarthy on Thursday’s call.
What’s intriguing about the choice of Chakravarthy is that digital experience is not only the smaller of Adobe’s two main business segments but also grew more slowly than digital media last year (Adobe combined the two segments in the revamp). Moreover, Goldman Sachs analyst Gabriela Borges suggested in an interview on The Information’s TITV on Friday that Adobe had more of an opportunity in its consumer business—essentially digital media services such as Photoshop—than in areas like marketing, where competition is intense.
And yet the person who ran digital media, David Wadhwani, is leaving as a result of Chakravarthy’s ascension. Huh.
Not that either side of the business has been a rocket ship: Adobe has been growing at a very steady 10% to 11% annual pace since 2021. Analysts are expecting the company to report 11.8% growth for the August quarter—nothing spectacularly different. The stock hasn’t been a strong performer, falling 24% so far this year. Yes, Adobe has not yet escaped the Saaspocalypse. We’re curious what Chakravarthy will have to say if he speaks on Thursday.
In Other News
• Humain, Saudi Arabia’s state-owned AI company, announced on Thursday an Arabic large language model developed based on Chinese AI firm MiniMax’s model.
• ByteDance is borrowing about $30 billion in its biggest-ever loan, according to a person with knowledge of the financing. The loan comes as ByteDance is ramping up its capex to expand its AI infrastructure.
• TikTok has backed out of a meeting with the U.S. House Select Committee on China that’s meant to address national security concerns. The company cited “a desire to avoid broader scrutiny of its child safety practices,” according to a statement from committee chair John Moolenaar on Wednesday.
• G42, the Abu Dhabi AI firm at the center of the United Arab Emirates’ AI push, has discussed handing majority control to American companies in order to keep buying the most advanced chips next year, including Nvidia’s H100 chips, Bloomberg reported Friday. Options included selling a majority stake or creating a new entity in the U.S., the report said. G42 did not respond for a request to comment at this time.
• DeepSeek plans to install at least 160,000 Huawei AI chips at a data center in Inner Mongolia, Northern China, Bloomberg reported, citing people familiar with the situation.
• OpenAI acknowledged that its AI agents posted messages on external wiki websites earlier this year, saying it is developing new rules for disclosing such “misalignment” incidents. The company’s post on X, published just after 12 a.m. Saturday, followed an independent report released Friday morning showing thousands of OpenAI agents took over DSEWiki, a German-language site that had fallen out of use, and turned it into a shared message board.
• Chinese tech giant Huawei Technologies launched a new smartphone chip on Monday that uses vertically stacked circuitry to improve performance, offering a potential workaround as U.S. restrictions limit its access to the most advanced chipmaking facilities and equipment.
Today on The Information’s TITV
Check out Friday’s episode of TITV in which we discuss Docusign’s product road map with its CEO.
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