Finimize - 🏔 The peak's almost here

What’s going on here?

Experts think the world’s thirst for oil will peak sooner than we’d thought.

What does this mean?

The International Energy Agency (IEA) just dropped some sunny new predictions, and they’ll be music to environmentalists’ ears. The organization has brought forward its projections, saying that the use of our top three fossil fuels – oil, gas, and coal – is going to start falling before 2030, thanks to the speedy rise of renewable energy and EVs. It also pointed out that China’s changing things up, shifting from heavy industry to less energy-hungry sectors like services. And given China’s outsized appetite for oil and gas in the past decade, that’s a big deal.

Why should I care?

For markets: Easy does it.

If we’re sidelining fossil fuels, then there’s a risk that oil and gas giants’ pricey operations will become “stranded assets” – basically, financial dead weight. But let’s be real: the world can’t quit its oily habit cold turkey, so for now, it’s going to be less “hit the brakes” and more “ease off the gas”. After all, if we skimp too much on fossil fuels, then we might face energy hiccups and price spikes. And remember, many oil bigwigs are also key players in the green transition – so it’s not a total loss for them either.

The bigger picture: Going green, seeing red.

Green’s the dream, but it’s not all smooth sailing. The "anti-green" gang is picking up steam, and it’s making the whole green living thing a bit tougher – especially with the rising cost of living. And it’s not just talk: Strive Asset Management, which is swimming against the tide of activists’ concerns and the green wave, has already managed to rack up over a billion dollars in assets. So don’t go assuming that the path to peak oil demand is going to be a smooth one.

What’s going on here?

Oracle’s stock took a dip after its quarterly sales failed to dazzle investors.

What does this mean?

Oracle, the enterprise software titan, has long been a barometer of corporate demand for tech. And for most of this year, the readings were optimistic – with its stock surging by a sturdy 55%. But this uptrend, like all good things, ultimately came to an end. The company didn’t just miss its revenue targets last quarter: it dialed down its projections for the current quarter too. There are a couple of reasons for that, but the main thorn in Oracle’s side is slowing growth in cloud sales – which signals potential headwinds for its ambitious cloud market expansion. That’s not to say it’s all stormy weather, though. The firm’s financial vital signs include a robust 72% gross margin and a 40% operating margin, and that suggests it’s not just earning well but spending wisely too. So while the revenue might have stuttered, profit growth remains on a solid footing.

Why should I care?

For markets: Clouded aspirations.

Oracle, traditionally celebrated for its database prowess, is now trying to climb the ranks as a cloud sector contender too – hoping to stand toe-to-toe with behemoths like Amazon and Microsoft. But the journey is proving challenging so far. With companies recalibrating their post-pandemic digital strategies, and with established players capturing clients’ attention, Oracle’s cloud ambitions are set to face stiff competition.

The bigger picture: AI’s silver lining.

Oracle’s foray into AI has been met with both excitement and skepticism. On one hand, the firm’s been touting contracts worth over $4 billion from their AI-focused cloud service, painting a promising picture. On the other, though, Oracle’s cloud infrastructure growth has been tapering off lately. Granted, the immediate revenue impact of AI remains a topic of debate – and the long-term potential of this technology could still be a game-changer for Oracle. But for now, investors are watching closely for some more tangible results.