Oracle's AI Cloud Costs Rattle Markets, But Mega Caps Power Recovery

Author: Gav Blaxberg | October 08, 2025 09:34am

ORCL slid on reports of weak margins tied to NVDA chips but some mega cap names like AMZN and NFLX kept the recovery alive.

Oracle margin worries hit early, recovery follows

Oracle sold off this morning after a report from The Information said its AI cloud business (powered by leased NVIDIA (NVDA) chips) generated roughly $900M in revenue but only $125M in gross profit, implying 14% margins versus the company's typical 40%+. The concern: steep GPU leasing costs and aggressive discounting to win clients.

The market initially dropped on the headline, pulling down AI-linked names, but found its footing as follow-up reports clarified that The Information's sources may have overstated the impact. Oracle recovered part of its losses by midday as traders reassessed the long-term profitability potential once utilization and pricing scale improve.

High-beta strength, megacaps hold the line

Despite the morning dip, high-beta tech and growth names bounced back, showing real resilience. Amazon and Netflix both traded higher, signaling that megacaps aren't breaking down and that speculative appetite is alive beneath the surface.

A standout play here is VistaShares Animal Spirits Daily 2X Strategy ETF (NYSE:WILD), which delivers 2x daily leverage across a basket of names like MSTR, NVDA, COIN, CRWV, and PLTR all key drivers of this risk-on rebound. The ETF is up 58% over the past month, riding the same momentum wave that's lifting these leaders.

AppLovin whiplash on SEC probe

AppLovin plunged 17% on Monday after reports surfaced of an SEC probe into its data-collection practices, tied to potential privacy and ad-targeting violations. But the stock ripped back today, recovering the entire loss and adding more… a full-on reversal that caught shorts leaning too hard.

$APP bounces almost 17% after Citi calls the SEC Probe a long term BUYING opportunity.

This is outstanding. https://t.co/bFetrCCDup pic.twitter.com/zgT4dMQIYZ

— Sam Badawi (@samsolid57) October 7, 2025

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

Posted In: WILD