Oracle’s results, TSMC, Ashtead’s move – what’s moving markets

Investing.com — Wall Street is seen trading in tight ranges Tuesday, with Oracle the main focus after the tech giant missed elevated revenue growth expectations. Chipmaker TSMC has continued to impress, while Ashtead eyes a New York listing. 

1. Oracle suffers from high expectations

Oracle (NYSE:ORCL) released its fiscal second-quarter results after the close of trading Monday, and its stock is seen trading sharply lower after its numbers fell short of Wall Street estimates despite ongoing AI-led demand for cloud infrastructure.

Oracle reported revenue of $14.06 billion in the second quarter, up 9% from a year ago, but below estimates of $14.11 billion, as per data compiled by LSEG.

Wall Street expectations for AI-linked firms have been high as they bet on the technology to be a strong growth driver in the future. 

The company has been pouring billions into upgrading its cloud infrastructure, and while Oracle has seen healthy growth in its cloud segment, it also has to compete with heavyweights such as Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) in the field.

Still, Oracle remains optimistic about the future, with chief executive Safra Catz stating total Oracle cloud revenue should top $25 billion in fiscal 2025. 

The company’s shares have soared over 80% so far this year, but are seen falling around 8% in premarket trading.

2. Futures edge lower; caution ahead of CPI

US stock futures slipped marginally lower Tuesday, with traders wary of investing at these elevated levels ahead of the release of key inflation data. 

By 04:10 ET (08:10 GMT), the Dow futures contract was down 23 points, or 0.1%, S&P 500 futures dropped 5 points, or 0.1%, and Nasdaq 100 futures fell by 30 points, or 0.2%.

The major indices fell Monday, with the S&P 500 and Nasdaq Composite retreating from the fresh record highs seen at the end of last week.

Trading is likely to be relatively quiet Tuesday, as the major event this week is Wednesdayâ€s release of the November US consumer price index report, which could influence the Federal Reserveâ€s thinking in terms of interest rates at its meeting next week.

Oracle will be in the corporate spotlight after the tech giant released results after the close Monday [see above], while results are also expected from the likes of GameStop (NYSE:GME) and Dave & Busterâ€s Entertainment (NASDAQ:PLAY).

3. TSMCâ€s revenue continues to grow

Taiwan Semiconductor Manufacturing (NYSE:TSM) posted another impressive quarter, as the worldâ€s biggest contract chipmaker reported a sharp year-on-year increase in revenue through November on strong AI-fueled demand. 

TSMCâ€s net revenue rose 34% from last year, resulting in year-to-date revenue growth of 31.8%, increasing slightly from the prior month. 

TSMC has seen an exponential jump in revenue over the past year on increasing demand from the fast-growing artificial intelligence industry. 

However, doubts have begun to grow over just how long this growth can be sustained, given that data centre building and demand for new chips is expected to slow eventually.

This data added some fuel to the fire as the November reading showed that revenue fell 12.2% from Octoberâ€s number.

TSMC is a key supplier to AI major Nvidia (NASDAQ:NVDA), and recently said it expects demand to remain robust going into 2025. 

4. Ashtead eyes New York listing

Ashtead (LON:AHT) is heading across the pond.

The British equipment rental firm plans to move its primary listing to New York from London, adding to the growing number of European companies that are choosing US listings, expecting valuations to be higher.

Ashtead has already made large inroads into the American market, starting with the acquisition of Sunbelt Rentals in 1990, with the region now accounting for the vast majority of its revenue and profit. 

The group, which rents out equipment in the construction, repair, entertainment and emergency response segments, is the second-largest equipment rental company in the US with 1,215 stores in all 50 states.

Ashtead expects the plan to be implemented in the next 12-18 months, after it has consulted with its shareholders.

The group also warned of lower annual profit due to a weak commercial construction market in the United States.

5. Oil awaits Chinese stimulus news

Crude prices stabilized Tuesday after the previous sessionâ€s healthy gains, as traders assessed the turmoil in the Middle East as well as the Chinese economic outlook. 

By 03:10 ET, the US crude futures (WTI) dropped 0.1% to $68.33 a barrel, while the Brent contract traded largely flat at $72.14 a barrel.

Oil prices rose over 1% on Monday, boosted by Chinaâ€s top political body raising hopes for more stimulus measures as well as heightened geopolitical tensions in Syria.

However, concerns have since eased about the fallout from Syrian President Bashar al-Assad’s overthrow, with Syria’s rebels working to form a government and restore order.

Turning back to China, the countryâ€s Central Economic Work Conference, which is set to begin on Wednesday, is now expected to provide more insight into planned stimulus after Beijing said it will “vigorouslyâ€� support local consumption at the start of the week.

In a positive sign, China’s crude oil imports jumped in November from a year earlier in the first annual growth in seven months, data showed earlier Tuesday.