Apple Is Flatlining, Oracle Is Soaring. This Is Determining Tech Stock Winners.
Sep 10, 2025 07:07:00 -0400 | #Markets #The Barron's Daily
The new iPhone Air is displayed during a product event at Apple headquarters. (Justin Sullivan/Getty Images)
Celebs, a big reveal, and some old-fashioned showmanship used to make an iPhone launch the hottest ticket in town. But that feels like a long time ago. Apple’s unveiling of its latest range of smartphones on Tuesday was pretty much as expected, including confirmation it’s still behind on the artificial-intelligence boom compared with technology peers.
The thinner iPhone Air model is something of a change for Apple. But the underlying message of the event was that customers and investors will have to wait until next year for supposed real change, with the expected launch of a foldable device with AI capabilities. Apple’s AI slowness is a black mark against the company, with the stock lagging behind Big Tech rivals.
A comparison with Oracle could not be more stark. The software firm posted earnings and the stock surged after it revealed its backlog of orders rose to $455 billion from $138 billion due to demand for cloud-computing infrastructure. Oracle and Apple are in different businesses, of course. But Oracle has aggressively pivoted its business toward AI under the leadership of CEO Safra Catz. Meanwhile, Apple boss Tim Cook has not shown comparable agility in the face of an AI challenge from rivals Samsung and Google.
There are a few points in Apple’s favor. It isn’t losing market share and isn’t having to make huge capital expenditures to support AI—Oracle’s capex has risen twentyfold in six years. Apple’s spending remains relatively muted despite U.S. investment pledges.
But low capex might not look like such a comparative advantage if the borrowing costs to fund that spending fall. Traders are locking in bets on the Federal Reserve cutting interest rates after data revisions indicated a weaker labor landscape than previously thought. The market is rewarding ambitious spending rather than caution at the moment.
“One more thing” was former Apple CEO Steve Jobs’ catchphrase when pulling out a surprise feature to wow the audience at these launches. Right now AI is the big “thing” investors want and Apple doesn’t have.
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Oracle’s Cloud Outlook Wows Investors Despite Mixed Earnings
Oracle may have reported mixed fiscal first-quarter earnings, but it was a significant increase in its backlog of contracted work that sent its shares soaring 27% in after-hours trading. The company’s cloud infrastructure business expects rapid expansion, according to CEO Safra Catz.
- Adjusted earnings rose to $1.47 a share while revenue rose 12% from a year ago to $14.9 billion. Both were slightly below expectations. Oracle also missed expectations for cloud services revenue growth, a key metric, and its guidance for the second quarter was in line.
- But the headline for many was Oracle’s contracted backlog rising to $455 billion, up from just $138 billion in the fourth quarter. The figure is indicative of the intense demand for renting artificial intelligence servers in the cloud, a business that Oracle, chaired by Larry Ellison, has only recently entered.
- Oracle’s sales growth masks a huge shift happening as it follows the Microsoft playbook. Once just a vendor of packaged software, Oracle is shifting customers to cloud-based versions with annual subscriptions, while at the same time launching a public cloud to compete with Amazon Web Services and Microsoft’s Azure.
- First-quarter revenue from Oracle’s public cloud services rose from a year ago. Catz said they signed four multibillion-dollar contracts with three customers in the quarter. They expect to sign up more multibillion-dollar customers and the backlog is expected to exceed half a trillion dollars.
What’s Next: Oracle has been aggressively building data centers to fulfill customer demand. In fiscal 2026 Oracle expects $35 billion in capital expenditures, up from $1.6 billion in 2020 before this shift began. The rocketing backlog will require even more capex to support it.
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Apple’s New Lineup Includes Much Thinner iPhone Air
High-end iPhone purchasers are about to find themselves with more choices as Apple releases a new iPhone Air on top of new Pro models in the latest iPhone upgrade. The difference is mainly aesthetic. The Air is much thinner, while the Pro has a heartier more versatile camera system and longer battery life.
- The new iPhone Air will sell for $999 in the U.S., while the price of the iPhone Pro went up to $1,099 and the Pro Max remains at $1,199. The new phones will arrive Sept. 19, with preorders beginning this Friday.
- Apple was forced to make a few other sacrifices to achieve the iPhone Air’s ultra-slim design. The new phone lacks the fastest 5G wavebands, something both the Pro and base iPhone 17 models support. The Air also sports a slower USB-2 connector, while the Pro supports USB-3 speeds up to 10 GBs per second.
- Apple also updated its line of AirPods, including a Pro 3 model that offers four times the active noise cancellation as the original Pro model, and live translation, which is powered by artificial intelligence. Users can speak in different languages, with the conversation translated in real time.
- The Apple Watch Series 11 has 24 hours of battery life, while main updates focus on personal health features. Apple has developed a feature that tracks potential hypertension, or high blood pressure, and will notify the user for signs of it.
What’s Next: The iPhone Air is Apple’s first new iPhone in years, designed to appeal to consumers after the tech giant has struggled to roll out AI features. It’s seen as a precursor to a foldable iPhone, The Wall Street Journal reported, something Apple is expected to roll out as early as next year.
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Judge Temporarily Blocks Trump From Firing Fed Gov. Cook
Federal Reserve Gov. Lisa Cook can keep her job for now, a federal judge said Tuesday night, paving the way for the policymaker to vote at the central bank’s policy meeting next week.
- “At this preliminary stage, the Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision,” Judge Jia M. Cobb wrote in granting Cook’s request, adding that the matter needed to be tackled further on a “non-emergency timeline.”
- Cook launched a legal battle on Aug. 28 to keep her job after Federal Housing Finance Agency Director Bill Pulte alleged that she made false claims on mortgage documents in 2021 that may have secured her more favorable loan terms.
- Trump cited that alleged mortgage fraud as cause for dismissal in an Aug. 25 letter firing her. Cook has argued that while a president has the statutory authority to fire a Fed governor, they can only do so “for cause.” That typically requires evidence that there were instances of “inefficiency, neglect of duty, or malfeasance.”
- The order allows Cook to continue to operate as a member of the board for the duration of the litigation and blocks anyone from obstructing Cook’s access to “any of the benefits or resources of her office.”
What’s Next: The Federal Open Market Committee, of which Cook is a voting member, is scheduled to meet on Sept. 16-17. Trump, who has repeatedly called for rate cuts, may finally get his way with a quarter-point reduction widely expected next week.
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Turf War Erupting Between Bessent and Pulte Over Mortgage Giants
Amid the Trump administration’s talks on what to do with mortgage giants Fannie Mae and Freddie Mac , signs of a fractious relationship have emerged between Treasury Secretary Scott Bessent and Bill Pulte, who regulates the two government sponsored enterprises. It could complicate the process.
- This week, Treasury officials have gathered representatives of major bond investors, lenders, consumer advocates, and others to talk about options for Fannie and Freddie, which together guarantee about $7 trillion in mortgage-backed securities. Major changes are being contemplated for the companies, which have been in government conservatorship since 2008.
- Tensions between Bessent and Pulte have become tabloid fodder. Pulte’s public profile has risen since he spearheaded a campaign to force out Fed governor Lisa Cook. Bessent reportedly threatened to punch Pulte during an event at D.C. private club after Bessent said Pulte had disparaged him in front of President Trump.
- Spokespeople for Pulte’s Federal Housing Finance Agency and Treasury didn’t respond to requests for comment. This week, FHFA is holding at least one Fannie-Freddie roundtable of its own, and some of the meetings’ participants see attempts by both agencies to plant their flags in the ground on the issue.
- The Treasury held two meetings Monday that focused on big-picture questions of how to reform the GSEs and the mortgage finance system, according to people familiar with the matter. Pulte meanwhile has focused on a near-term public offering of about 5% of the government’s shares.
What’s Next: Both the Treasury and FHFA have a stake in the outcome. Treasury officials did reiterate assurances that Bessent has made publicly in the past that changes to Fannie and Freddie would “do no harm” and wouldn’t raise mortgage rates.
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Clues Emerging for Health Insurers Facing Medicare Advantage Ratings
Big health insurers are in the spotlight as they await the federal government’s quality ratings to their Medicare Advantage plans. Higher ratings bring bonus payments that amount to billions of dollars a year for the biggest health insurers. While they aren’t officially out yet, clues as to how they could shake out are emerging.
- The group includes Humana, which specializes in the government-funded health plans, and UnitedHealth, which said Tuesday that 78% of its Medicare Advantage members would be in highly rated plans. CVS Health and Centene are also providers. Good news on bonuses would affect the group’s earnings trajectories.
- Medicare Advantage has turned into a tricky business in recent years, as seniors have sought out higher-than-expected levels of medical care. The Centers for Medicare and Medicaid Services will pay out at least $12.7 billion in quality bonus payments to highly rated plans in 2025, according to the policy group KFF.
- CMS, which administers the Medicare Advantage program, changes how it calculates the quality ratings from year to year. The ranking system for the 2026 plan year was released to insurers on Monday night, according to Leerink Partners analyst Whit Mayo, and posted to LinkedIn midday.
- The implications of the 2026 ranking system weren’t immediately apparent. Leerink’s Mayo wrote Tuesday that more than half of the measures on which CMS assesses Medicare Advantage plans got more difficult, calling it a “challenged look” for the industry.
What’s Next: For UnitedHealth, 78% of its members being in highly rated plans is reasonably good news. The company has had a long-term goal of having 80% of its members in plans rated four stars and above.
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Dear Quentin,
My now ex-husband sold most of his remaining IRA without my knowledge or approval prior to our divorce. Is it legal for one member of a married couple to authorize the sale of an IRA in a joint managed account without the other member being notified or giving approval for its sale in the state of Michigan?
Did the wealth management company have a fiduciary responsibility to notify me prior to the sale?
— Feeling Swindled
Read the Moneyist’s response here.
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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner