The idea of risk sits at the very center of global financial markets. Assets are valued using a "risk-free" interest rate, and an investor's tolerance in either taking risk on, or shunning it entirely, dictates the prices of those assets throughout the whole of their tradable life.
Markets are gripped by two kinds of risk at present, which can be broadly categorized as good and bad.
One is linked to the U.S. war with Iran that includes myriad possible outcomes and a host of potential spillovers, nearly all of them bad.
Oracle, the cloud software giant founded by technology billionaire Larry Ellison, might be the best representation of the other kind of good risk, which is tied to the emergence of artificial intelligence technologies and the massive amounts of capital being poured into their development.
It's tethered to ChatGPT creator OpenAI, it's spending billions on data centers it hopes to develop its cloud infrastructure business, and it's getting hammered in the market by concerns over its debt, growth, and strategy.
Late Tuesday, however, it blasted through Wall Street's earnings forecasts, and its longer-term order backlog swelled to more than half a trillion.
Shares of the group, one of the market's worst performers this year, were soaring in premarket trading Wednesday as investors seemed eager to take on some of that "good" AI risk.
Broader markets, meanwhile, were largely flat, and investors seem uneasy about taking on the "bad risk" of the Iran war as headlines that could tear apart any investment strategy are merely a social media post from the president away.
If Oracle's "good risk" can bring some investors out of the cold, it could be an early sign that markets are ready to move beyond the U.S.-Iran headlines. If it can't, we may be stuck with "bad risk" markets for a while longer.
-- Martin Baccardax
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Oracle's AI Momentum Builds as Revenue Outlook Jumps
Oracle beat expectations for the third quarter, reaffirmed its 2026 guidance, and set higher than forecast expectations for 2027 revenue of $90 billion. It said this was its first quarter in over 15 years where organic total revenue and non-GAAP earnings per share both grew at 20% or more.
-- Oracle reported adjusted earnings of $1.79 a share and revenue of $17.2
billion, up 22% from a year ago. Revenue from its cloud segment, which
now represents over half of sales, rose 44%, led by Oracle Cloud
Infrastructure -- renting out servers over the internet -- which saw
revenue rise 84%.
-- Its backlog grew $29 billion, to $553 billion, with about $300 billion
from a single multiyear contract with OpenAI. Oracle said it doesn't
expect to have to raise any incremental funds to support these contracts.
Most of the equipment needed is either funded upfront by customers or
supplied by the customer.
-- The rapid growth of the cloud infrastructure unit comes with a high cost.
Despite strong adjusted operating income, depreciation expenses from
rising capital expenditures are beginning to drag on operating margin.
Even though quarterly operational cash flow hit $7 billion, it was erased
by $19 billion in data center capex.
-- Oracle's legacy software, hardware, and services businesses grew by a
combined 4%, to $8.3 billion. Oracle CEO Mike Sicilia rattled off a long
list of AI integrations with Oracle software and said such systems can't
be easily swapped out and replaced with a collection of niche features.
What's Next: Guidance for the current quarter was in line with expectations, and Oracle said fiscal year 2026 revenue is expected in a range of $67 billion, with capital expenditures of $50 billion. To pay for the capex, Oracle added another $27 billion in debt in the quarter.
-- Adam Levine and Liz Moyer
Ackman Entices New Fund Investors With Firm Stake
Billionaire Bill Ackman has an interesting inducement to get investors to buy a new U.S. closed-end equity fund, but whether it will be enough to attract a sizable number of investors remains to be seen. It's another attempt at offering his new investment fund, Pershing Square USA.
-- Investors in that Pershing Square USA investment fund will get 20 "bonus" shares of his Pershing Square Inc. management company for every 100 shares they buy in his investment fund. He aims to raise $5 billion to $10 billion for the Pershing Square USA fund. -- Ackman has filed for a dual initial public offering of his management company and the investment fund on the New York Stock Exchange, in a major test of public investors' appetite for exposure to his empire. He is banking on his star power to attract investors. -- The incentive is designed to offset a decline in the shares of the closed-end fund once Pershing Square USA starts trading. Ackman secured $2.8 billion in commitments from family offices, pension funds, insurance companies, and ultra-high-net-worth investors, who get 30 bonus shares for every 100 shares bought. -- The Wall Street Journal in late 2025 reported that Ackman, who failed to bring Pershing Square USA public in 2024 amid lackluster demand, could seek a valuation "well over" the $10.5 billion valuation after he sold a 10% stake in his Pershing Square business to investors in 2024.
What's Next: Ackman is the largest shareholder of the management company that will get a lucrative fee stream of $200 million a year if the closed-end fund raises $10 billion. The offering is expected by the end of this month.
-- Andrew Bary, Adam Clark, and Janet H. Cho
Saudi Aramco Plans to Bypass Strait of Hormuz
Saudi Arabia is on the verge of ramping up an alternate pipeline to export its oil, rather than through the Strait of Hormuz, a move that could ease -- though not eliminate -- the bottleneck that has driven crude prices higher.
-- A pipeline to move oil from the kingdom's oil fields to the Red Sea in
the west is days away from hitting full capacity, said Amin Nasser, CEO
of the Saudi Arabian Oil Company, known as Aramco. It would help its
supply avoid the Strait of Hormuz, a critical chokepoint that is blocked
because of the war in Iran.
-- Aramco's East-West pipeline is no panacea. It can only export about five
million barrels a day of crude oil, or about 70% of the seven million
barrels Aramco exports every day.
-- Currently, tanker ships are unwilling to travel through the Strait of
Hormuz, which takes upward of 17 million barrels of oil a day from the
Middle East to Asia and Europe -- including the vast majority of Saudi
production in normal times. The Saudi East-West pipeline and a few others
in the region can reroute some of that product.
-- Nasser, who was speaking on Aramco's fourth-quarter earnings call Tuesday,
said the war in Iran is the biggest crisis for oil markets in history and
that there would be "catastrophic consequences for the world's oil
markets the longer the disruption goes on."
What's Next: Hostilities in the Strait of Hormuz will remain a key driver of oil prices, while the International Energy Agency's proposal to release 400 million barrels of reserves will be decided on by the organization's 32 member countries later on Wednesday.
-- Avi Salzman and Alex Kozul-Wright
AT&T Investing $250 Billion to Expand Network Nationwide
AT&T is spending $250 billion to accelerate its deployment of fiber, 5G, and wireless nationwide over the next five years. The telecommunications and technology services company outlined its investment plan and said satellite maker AST SpaceMobile would help extend cellular coverage into remote areas.
-- The capital investments include both new investment and long-term
operating costs. During its fourth quarter earnings, AT&T projected $23
billion to $24 billion in capital investment annually between 2026 and
2028.
-- AT&T, Verizon Communications, and T-Mobile US are all plowing money into
fiber connectivity and 5G as cable providers are luring away customers
with mobile phone bundles. AT&T is hiring more technicians and investing
in artificial-intelligence fluency training ahead of the transition to
next-generation 6G technology.
-- The expansion comes as the market is grappling with Big Tech's aggressive
capital expenditures on AI. Amazon.com, Google parent Alphabet, and
Microsoft stocks are all lower this year, dragged down because their
aggressive spending guidance has rattled investors.
-- Telecoms are hoping for a better return on their investment in the second
half of the decade as 5G spending normalizes, although they will need to
adjust for growth of AI-driven traffic.
What's Next: AT&T wants to avoid costly "rip and replace" equipment changes, Yigal Elbaz, its network chief technology officer, recently told Barron's. The telecom wants to ensure that it can upgrade 6G with software by a push of a button because it has already invested in the hardware.
-- George Glover, Adam Clark, and Janet H. Cho
First Time Homebuyers Are Back. What Could Interrupt Momentum.
There is a thaw in the real estate market for spring. Mortgage rates are more than half a point lower than a year ago. Home price gains are negligible. And first-time buyers, long stuck on the sidelines, made a strong return in February, according to National Association of Realtors data.
-- Housing costs, including monthly principal and interest payments, are the
most affordable they have been relative to the median U.S. family income
since 2022, according to a NAR index. First-time buyers in a Realtors
survey of agents represented 34% of February sales, one of the biggest
percentages in five years.
-- February's sales, at a seasonally adjusted 4.09 million pace, increased
from the prior month and beat expectations, but was still down from a
year ago. The median home price of $398,000 was up 0.3% from a year ago,
the third straight month of gains under 1%.
-- But geopolitical and macroeconomic factors could interrupt things, NAR
chief economist Lawrence Yun warned. The mortgage rate relief itself
could be fleeting if rising inflation expectations continue to send the
10-year Treasury yield higher. That is already happening as a result of
the war in Iran.
-- Higher oil prices can contribute to inflation, Yun noted. Inflation
expectations have sent the 10-year Treasury yield higher, which puts
upward pressure on mortgage rates. Since the end of February, 30-year
fixed rates measured by Mortgage News Daily have increased 0.15
percentage point to a recent 6.14%.
What's Next: Nancy Vanden Houten, who is the lead U.S. economist at Oxford Economics, told MarketWatch that she expects home sales to improve gradually as the year goes on, assuming the conflict in the Middle East doesn't last more than a few months.
-- Shaina Mishkin
Dear Quentin,
My brother, who has cerebral palsy and is developmentally disabled, is two years older than I am. I have no other siblings. Other than severe essential tremors that limit the use of his hands, he is in good health. He does not drive, has difficulty dressing himself and needs help with his personal hygiene, cooking and cleaning.
My parents begged me never to put him in a home and I promised I never would. Knowing my responsibilities, I decided not to start my own family and instead worked hard to aggressively save money for both of our futures. I don't spend money on makeup or manicures like my friends do.
I used my savings to buy a piece of land when it went into foreclosure, and I built our house, acting as the general contractor during the 2008 downturn. I retired early when my father passed away, took a minimum-wage part-time job, and assumed caregiving. I realized I was too stressed to work full time when my hair started to fall out.
Thus far, I have $560,000 in my IRA, $125,000 in stocks and $50,000 in savings. My house, car and credit cards are paid off. Our nondiscretionary expenses average $4,000 per month. My income from my pension and part-time job is $10,000 per month. He receives $1,800 per month from Social Security and is on Medicare.
My aunt just passed away and I inherited her IRA, valued at $230,000. My house was appraised at $1.8 million, and we could sell it and downsize if I needed the equity. My nondiscretionary expenses include property taxes and insurance. I think I have enough savings to pay for a new roof or other home repairs.
I have been very frugal. I am in good health, although my friends are beginning to feel their age. I would like to travel and enjoy life, and pay for temporary caregivers while my health is still good, but would that be irresponsible? I could always start collecting my Social Security if needed.
My IRA has been invested aggressively because I have been able to live off my pension. We do not have long-term-care insurance. If I take my Social Security at full retirement age, it will be $3,765 per month. How should I invest to be able to provide for myself and my brother?
If I predecease him, my assets will fund a special-needs trust. Do I need life insurance? Most of my discretionary spending goes toward saving. Unlike my friends, I have never had a housekeeper or landscaper. I rarely dine out or watch TV. Going to a matinee is like a vacation. How much could I spend on travel without feeling irresponsible?
-- The Sister
Read the Moneyist's response here.
-- Quentin Fottrell
-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 11, 2026 06:47 ET (10:47 GMT)
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