TOP STORY
📲 Apple Jumps 5% After Unveiling the First Foldable iPhone

☀️ Happy Sunday everyone! It was another busy week in the markets, so let’s get right into it…

🎢 Brent Crude officially crossed $100/barrel for the first time since July this week, with stocks falling four days straight up until Friday.

✨ On Friday, we got some good news when August inflation numbers (CPI) held steady from July, giving us the only green day of the week.

📊 Across the week:

• The S&P 500 fell -0.80%

• The Nasdaq 100 fell -0.59%

• The TSX fell -2.24%

😬 Consumer sentiment remains at all-time lows, with the University of Michigan’s “Index of Consumer Sentiment” falling to 47.8, the second-lowest reading in the survey’s history going back to 1952 (and down 8% from August), and U.S. households now expecting 4.6% inflation over the next year (compared to 4% last month).

😰 All this has made the interest rate situation even worse, with the odds of the Fed increasing interest rates on Wednesday now sitting at 86.7%, up from 59.4% just a week ago.

📈 One bright spot is that surging oil prices have helped the Energy sector ($XLE) rise a whopping 43% year-to-date, making it the best-performing sector in the market (and a great reminder why sector diversification matters!).

🐝 But Macro picture aside, let’s get into our biggest stories of the week. Today we’ll cover:

• Apple ($AAPL) jumping 5% after unveiling the first foldable iPhone

• OpenAI delaying its IPO "to prioritize safety" and the growing debate over whether AI doom warnings are real or just a marketing ploy

• And whether Oracle ($ORCL)’s earnings can turn things around for a stock now down 50% in the past year

🍎 Starting first with Apple…

📱 Apple Surges 5% After Unveiling the First Foldable iPhone

🍎 On Wednesday, Apple ($AAPL) held its “Surprise and Shine” event, the first event headlined by the company’s new CEO, John Ternus, where he announced the new iPhone Duo, a product Apple calls its “biggest reinvention” of the iPhone since first launching.

🌟 iPhone Duo is Apple’s first-ever foldable iPhone, with a passport-shaped 5.4-inch outer screen and a 7.6-inch tablet-sized display when opened, powered by Apple’s new A20 Pro chip.

💰 The Duo’s price starts at a whopping $1,999 in the United States ($2,999 CAD), $100 more than Samsung’s and Google’s comparable models.

📊 Other announcements at the event:

• 📱 The iPhone 18 Pro and Pro Max, with new colours and a $100 price bump ($1,199 and $1,299), new 48MP variable-aperture cameras, and deeper “Siri AI” integration

• ⌚ The Apple Watch Series 12 and Ultra 4, with a redesigned health-sensing system and AI-powered health insights

• 🎧 New AirPods 5 at $129, bringing active noise cancellation to the company’s entry-level buds for the first time

• 📺 Watch the full event here!

💾 One big topic of convo was rising prices, a direct result of rising memory chip costs that Tim Cook warned about on his final earnings call.

📈 But despite the price increases, markets reacted positively, with Apple rising 5% the next day and up 40% over the past year.

🎯 What Analysts Are Saying About the Duo

📈 So with the stock jump, what are analysts saying about the new Duo?

📊 Well, sales estimates for the iPhone Duo cluster in the 5-6 million unit range for its first year, ~24.8% of the global foldable market, which would put it second place behind Samsung's 7.1 million (35.1% share).

✨ Some are even more optimistic, with IDC saying Apple will likely sell every unit it can make and could reach 40% of the foldable market by 2027.

💰 Wedbush's Dan Ives says the Duo's contribution to iPhone revenue "could be 15 to 20%," which at Apple's current revenue would put the high end at ~$42 billion a year.

🔄 And the upgrade math is compelling: Ives estimates ~300 million of Apple's 1.5 billion active iPhones haven't upgraded in four years, a massive pool of aging devices now staring at a genuinely flashy upgrade…

🤖 But What About AI (aka Apple Intelligence)?

😬 So the Duo answered the hardware question. But the bigger question hanging over Apple is still AI. Back in April, we covered John Ternus inheriting an AI slump as Apple's new CEO, with some on Wall Street growing impatient for Apple's answer to the AI race.

🤖 Since then, Apple has pushed hard to answer the AI doubters. Alongside the Duo, Apple also announced that on Monday it ships "Siri AI" via iOS 27: a Gemini-powered assistant that connects to your apps and messages to act as a true personal assistant, working with over 300,000 apps at launch.

⭐️ Ternus' pitch is that the iPhone becomes your "intelligent personal hub," with AI running on-device wherever possible for privacy.

💬 Bank of America's Wamsi Mohan laid out the bull case for what the means for Apple back in May:

📈 Many analysts beleive these AI upgrades and the new Duo will drive an upgrade cycle and lift the average sale price on the iPhone, driving a great year ahead for the world’s most valuable company.

🙋‍♂️ Personally, I invested in Apple a month ago after earnings, and the recent announcements make me even more bullish on Apple’s prospects!

🤖 All right, let’s shift gears to our second big story this week - OpenAI delaying its IPO and the growing debate over whether AI doom warnings are just a marketing ploy…

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AI DOOMERISM
😰 OpenAI Delays Its IPO “To Prioritize Safety”… but Is “AI Doom” Just a Marketing Ploy?

🚨 Moving on to AI, we had another massive story this week, with Sam Altman telling Fortune that OpenAI will NOT go public this year, calling 2026 “an ill-advised moment” for a listing, and saying the IPO won’t happen until next year so the company can focus on safety concerns around its technology.

😨 And he didn’t use gentle language either:

🤝 But if it couldn’t get more apocalyptic, the same weekend Anthropic CEO Dario Amodei published a ~4,000-word blog post pledging to slow model releases and add new safety measures, with both Sam Altman and Elon Musk publicly backing him, right after a high-profile Anthropic researcher resigned over fears the industry is acting irresponsibly.

📅 OpenAI now expects to go public in 2027, while Anthropic’s IPO is still expected for 2026.

🧐 Is “AI Doomerism” Just a Marketing Ploy?

👀 Now, a growing criticism around these apocalyptic warnings from AI CEOs is that it’s a clever marketing ploy. Basically, saying “our product has a 10% chance of ending humanity” implies it’s the most powerful technology ever built.

😰 Communication researcher Nirit Weiss-Blatt calls it “AI Panic Marketing,” while professor Lee Vinsel coined the term “criti-hype,” where any criticism of AI actually feeds the hype (because every scary headline by a tech CEO about AI’s power is still a headline about how powerful AI is / will become).

📈 And this fear has had a direct impact on stock prices, two weeks ago we covered how the "Mythos moment" (companies panicking about rogue AI) fueled CrowdStrike ($CRWD)’s best quarter ever and a sector-wide cybersecurity boom (read that article here)

✅ The Case That It’s Genuine

⚖️ On the flip side, AI safety concerns aren’t some new thing, and this summer’s “Hugging Face attack” (where rogue AI agents at OpenAI broke out of training and pulled off an autonomous cyber-attack did actually happen.

💰 In fact, the strongest counter to the “AI doom is a marketing theory,” at least for OpenAI, is that delaying an IPO is expensive, especially at peak interest.

👀 Join the debate about this on Blossom, and share your opinion on the poll below and see what the community has to say about this debate!

👀 While we’re on the topic of AI, let’s move on to our final story of the day: Oracle. Why it’s down 50% in the past year, and whether its recent earnings show signs of a turnaround…

📊 But first, a quick word from our other sponsor this week, Stock Analysis!

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EARNINGS RECAP
☁️ Oracle’s Down 50% in the past Year: Can Recent Earnings Turn Things Around?

📉 Almost exactly one year ago, Oracle ($ORCL) closed at its all-time high of ~$325 after wowing Wall Street with its AI backlog. This week it reported earnings with the stock down ~50% from that peak, one of the most brutal round trips in the entire AI trade.

😰 So what happened? In short, investors stopped celebrating Oracle's AI orders and started worrying about how Oracle is paying for them. A few of the most concerning metrics:

• Capital spending more than doubled last fiscal year (to $55.7 billion, from $21.2 billion)

• Free cash flow has flipped deeply negative

• The debt pile swelled to $125 billion, and along the way Oracle suffered a credit downgrade, a spike in the cost of insuring bonds, and the "OpenAI proxy" problem we'll get to below…

📊 So Oracle had a lot to prove in this week’s earnings. And the numbers were arguably strong:

• ✅ Revenue hit $19.35 billion vs. $19.14 billion expected, up 30% year-over-year

• ✅ EPS hit $1.92 vs. $1.74 expected, up 31% year-over-year

• ✅ Cloud infrastructure revenue jumped 121% to $7.4 billion, with total cloud revenue up 62%

🤯 And the demand pipeline is staggering: Oracle added 850 megawatts of data center capacity in the quarter, delivered more than 300,000 GPUs to its AI cloud customers, booked over $30 billion in new AI cloud contracts, and now sits on a $664 billion revenue backlog (up $209 billion year-over-year), with roughly half expected to convert into sales within three years.

🎢 The market reaction was mixed, with the stock first rising as much as 8% on Friday, only to reverse massively and end the day down nearly 2%.

🤔 A “Landlord of AI”

🏡 As a quick refresher, over the past couple of years Oracle has reinvented itself as the “landlord for AI” through Oracle Cloud Infrastructure, where it now builds massive data centers stuffed with GPUs and rents that computing power to AI labs.

🤝 By far Oracle’s biggest customer is OpenAI (which takes up ~50% of Oracle’s backlog). And because of this large concentration, Oracle has started trading almost as a ‘shadow stock’ of OpenAI.

😬 But lately that dependency has been more of a curse than a blessing. When Anthropic overtook OpenAI in enterprise sales this year, Oracle’s stock fell.

✨ Which is why this quarter's most important number wasn't the 30% growth, it was WHO the new bookings came from: a range of new customers beyond OpenAI (including Nvidia, Meta, AMD, and SpaceX's AI business). As Barron's put it, the results should signal to Wall Street that Oracle is "so much more than a bet on OpenAI."

💸 So Why Can't the Stock Go Up?

😰 One number: $125 billion in debt. Oracle is borrowing enormous sums to build data centers, and this quarter alone it burned $5.4 billion in cash (vs just $362 million a year ago), with its free cash flow sinking deeper and deeper into the red.

💰 Oracle plans to raise another $40 billion through debt and equity this fiscal year, and on Friday it disclosed its restructuring costs (including job cuts) are rising by another $700 million to $2.8 billion.

💬 Many analysts remain bearish on the stock, with one saying:

🐂 But the bulls see it differently. Ci said the quarter checked “nearly every box and reinforces the bull case,” with KeyBanc stating that the new bookings came from a broader set of customers, making Oracle “less dependent on a small number of AI giants.”

✨ Their argument is that the cash burn was actually far smaller than feared (analysts expected ~$9.6 billion) and much of the new contracted revenue relies on customer prepayments rather than Oracle's own capital

🔥 In fact, overall on TipRanks, analysts rate Oracle a ‘Strong buy’ with the average price target 70% above the current price.

🤝 Even Larry Ellison (Oracle’s co-founder and chairman) weighed in with his wallet: after disclosing a plan to sell up to $7.5 billion of his Oracle stock, the 82-year-old founder canceled it a day later, with the company stating he "has no other plans to sell any of his Oracle stock."

💡 On fundamentals, Oracle now trades at ~19x forward earnings vs. Microsoft’s ~25x and Google’s ~22x, so the market is pricing in doubt relative to Big Tech players.

🧩 So, can Oracle turn it around after falling 50%? The puzzle pieces are there: a $664 billion backlog, a broadening customer list, customers footing more of the bill, and an attractive P/E… but whether investors can get over the declining cash flow and debt worries is the big open question.

🗓️ The next big date for Oracle is its AI World event in October, where management updates its long-term targets, so we won’t have to wait long for an update!

FROM THE BLOSSOM COMMUNITY
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