"Today is Day 8, and the economy is starting to show signs of stress at various pain points. Airports in Boston, Chicago, Houston, Las Vegas, Nashville, and Philadelphia - to name a few - have all reported flight delays caused by strain on the air traffic controllers who have been working without pay now for more than a week."
"Adding to investor worry is a report from The Information suggesting that the artificial intelligence economy may not be all it's cracked up to be. Focusing on software giant Oracle ( NYSE: ORCL), which has been taking a prominent position in AI, The Information reports that cloud profit margins look weaker than forecast and the company may be losing money on "some" deals wherein it rents out computing power to AI providers."
"Seaport Global Securities analyst Angie Storozynski upgraded shares of S&P 500 component company Constellation Energy ( Nasdaq: CEG), a large electric utility, operator of the Three Mile Island nuclear power plant, and supplier of power to large AI providers such as Microsoft ( Nasdaq: MSFT). "The multiples are still rich vs. those of VST, CEG's closest peer, but for a good reason given CEG's size and its nuclear/gas earnings mix," says Storozynski. Still, "we would want to be long CEG into its refreshed earnings update.""
The Vanguard S&P 500 ETF (NYSEMKT: VOO) fell 0.4%, ending a six-day winning streak as the U.S. government entered Day 8 of a shutdown. Multiple major airports reported flight delays due to air traffic controllers working without pay. A report from The Information raised concerns about AI cloud profitability, noting Oracle (NYSE: ORCL) may face weaker cloud margins and could lose money on some AI-compute deals, prompting a 2.5% share drop before modest premarket recovery. Seaport Global upgraded Constellation Energy (Nasdaq: CEG) to buy with a $407 target, citing its size and nuclear/gas earnings mix. Citi upgraded Freeport-McMoRan (NYSE: FCX) to buy.
Read at 24/7 Wall St.
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