Oracle Gets Piper Sandler’s Backing Ahead of Earnings: $22B in AI Contracts Ease Capex Fears

Oracle (ORCL) is set to report its latest quarterly results, and Piper Sandler has stepped in with a bullish note, arguing the market may be overreacting to the company’s massive capital spending. The firm highlighted that Oracle currently holds roughly $22 billion in AI infrastructure contracts, providing strong visibility into future revenue growth. The stock rose intraday on July 6 following the call. As of 2:00 p.m. ET, Oracle was trading at $143.50, up 2.30% from the prior close of $140.27, with a session high of $145.62.^[CNBC]

The Double-Edged Sword of AI Contracts and Capex

Piper Sandler’s bullish stance stands in sharp contrast to recent market worries over Oracle’s “spend-to-grow” model. According to 24/7 Wall St., Oracle’s AI infrastructure spending is massive, with cloud infrastructure revenue jumping 93% YoY to $5.79 billion in the latest quarter.^{[24/7 Wall St.]} Management signed $67 billion in AI infrastructure contracts in a single quarter, with global GPU utilization running at 97.5%.^{[24/7 Wall St.]}

But the heavy capex has come at a cost. The same report noted that Oracle’s free cash flow turned negative, hitting -$23.69 billion. This “profits-for-scale” strategy has weighed on the stock, which is down 26.02% year-to-date through July 1, closing at $142.50.^{[24/7 Wall St.]} Still, the company’s RPO of $638 billion — up 363% YoY — offers strong multiyear revenue visibility. Of that, $75 billion is tied to prepaid or customer-provided GPU arrangements, which helps ease Oracle’s own capital burden.^{[24/7 Wall St.]}

Earnings Season Nears, Tech and Energy Lead the Pack

Oracle’s report comes as the broader Q2 earnings season gets underway. According to Forbes, the S&P 500’s Q2 earnings season kicks off the week of July 13, led by big banks. FactSet data shows the index’s blended earnings growth rate is expected to come in at 23.3%.^[Forbes]

By sector, energy is expected to lead earnings growth, with tech close behind. Tech is projected to lead in revenue growth. Forbes also noted that a slightly weaker dollar is expected to benefit companies with high international exposure, particularly in tech. Goldman Sachs estimates that every 10% decline in the dollar adds 2–3% to S&P 500 EPS.^[Forbes]

Other Market Moves: Goldman Picks ‘Undervalued’ Stocks, Gold Miners in Focus

Beyond Oracle, other Wall Street firms are making moves. Goldman Sachs last week flagged a list of stocks it sees as having upside in July, including auto parts retailer O’Reilly Automotive. Analyst Kate McShane said the stock has been under pressure for multiple reasons but remains undervalued, and data checks show the company’s Q2 performance was stronger than peers.^[CNBC]

Meanwhile, gold’s wild swings are drawing attention. According to Simply Wall St, gold just suffered its worst quarterly selloff in 13 years, putting South African gold producer DRDGOLD (DRD) back on investors’ radar. The report notes DRDGOLD trades at a P/E of 9.6x, well below the industry average of 27.6x, with an estimated 52% discount to intrinsic value. Analysts have a price target of $46.50.^{[Simply Wall St]} Despite a bounce over the past week, the stock’s 30-day and 90-day returns are -14.45% and -29.81%, respectively, showing recent momentum has faded.^{[Simply Wall St]}

Earnings Calendar: S&P Global Sets July 28

On the earnings calendar, S&P Global (SPGI) announced on July 6 that its Q2 2026 results will be released before the market opens on Tuesday, July 28. President and CEO Martina Cheung, CFO Eric Aboaf, and other executives will host a conference call at 8:30 a.m. ET that day to discuss the results.^{[Financial Times]}

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