The Rundown - Oracle Rises As AI Backlog Hits $664B, Adobe’s Earnings Beat Not Enough for Investors

Episode Date: September 11, 2026

Market update for September 11, 2026. Check out the Public app for incredible investing tools and to support the show (LINK)Follow us on Instagram (@TheRundownDaily) for bonus content and instant reactions.In today's episode, Zaid covers:Why sticky inflation and $100 oil just pushed Fed rate hike odds to 90%The bond market selloff driving the 10-year Treasury yield to the brink of 5%Oracle's massive cloud earnings and the wild "pre-order" strategy funding its AI buildoutRH’s earnings beat and the tariff refund helping its bottom lineAdobe’s earnings beat and why investors still aren’t convinced about its future in AIWhy retailers are quietly killing the era of free online returns

Public.com presents the rundown. Your daily market update in 10 minutes. My name is Zadad Mani, and today is Friday, September 11th. In today's episode, we'll break down this morning's inflation report and why the odds of a rate hike just jumped. We'll also recap Oracle's earnings and their new pre-order strategy when it comes to AI data centers. Then stick around to the end of the show to find out

why returning your online purchases is getting a lot more annoying these days. We got a great show for you today. Let's go. Well, stocks kept moving lower this week. The S&P 500 fell 0.6% on Thursday, while the NASDAQ dropped 0.7%, making that the fourth straight red day for the market. And you know, at this point, I think the story driving the stock market has clearly shifted from the AI hype this past summer to max.

like oil prices and the bond market. Oil prices continue to surge yesterday with Brent crude now trading above $107 a barrel as the war with Iran continues to disrupt the energy market. At the same time, the 10-year treasury yield jumped to 4.94% while the 30-year yield hit 5.36 percent, its highest level since 2004. And the fact that the 10-year treasury yield is approaching 5%, I mean, that is a pretty significant psychological level. You know, the 10-year treasury yield is a year treasury yield is low-key the most important metric in the financial system and the economy. It influences everything from corporate borrowing costs to mortgage rates. In fact, the average 30-year mortgage rate is back above 7% again.

Not to mention higher bond yields make stocks less attractive to investors because investors can just earn 5% lending money to the U.S. government, which is a risk-free return. So the macro picture is getting ugly. And by the way, the CPI report from this morning isn't helping. According to the August CPI report, prices jumped 0.4% in August month over month, and they were up 3.4% year over year. Now, those numbers were in line with expectations, but core inflation, which strips out food and energy prices, came in that 0.3% month over month, which was hotter than the 0.2% that Wall Street expected. So that's a sign that higher energy costs are now bleeding into other prices across the economy. And remember, this inflation report is backward looking.

It's for the month of August, and we've seen crude prices jump 15% in September already, so things could continue to get worse. And that's why the odds of a rate hike for the Fed meeting next week just jumped from 70% before the inflation report to 90% now. My personal opinion for the last few months has always been the Fed would hold off on hiking rates until next year. But now it looks like we're getting a rate hike next week. So we are in a very interesting moment for the markets right now.

We're going to be staying on top of all of this. So definitely get subscribed to the podcast if you haven't already. And tune in every day to stay in the loop. Let's run through some headlines, starting with Oracle. Oracle reported earnings last night, and the stock is getting a nice pop this morning after a pretty strong quarter. Revenues jumped 30% from a year ago to $19.3 billion estimates, while adjusted earnings came in at $1.92 a share versus the $1.1.

$1.74 cents that was expected. So it was a strong quarter from Oracle, and it was a year ago where Oracle really burst onto the scene, and the market started taking them seriously as a potential winner of the AI boom. Oracle's stock hit all the time highs back in September of 2025, but since then, it's been a bumpy ride. The stock is actually down 50% from those levels. But Oracle's business continues to crush it, especially their cloud infrastructure business. This is a part of the company that includes their data centers that they rent to companies for AI computing power. Remedies for the cloud infrastructure were up 121% from a year ago to $7.4 billion. And you know, if you take out that division, the rest of Oracle grew just 3%. So almost all of Oracle's

growth is coming from AI. And the demand for AI compute is still ridiculously high. Oracle signed more than $30 billion in new AI cloud contracts last quarter, pushing their total backlog to $664 billion. That was well above. of what Wall Street was expecting. Now, there were a couple concerning things in the earnings report when you dig a little deeper. For one, almost half of Oracle's backlog

is from a single customer, which is OpenAI. Oracle did say that their non-open AI backlog more than doubled in the past year, but still, there is pretty big concentration risk there. The other problem for Oracle is their CAPEX. I mean, the cost of building the AI infrastructure and serving the compute continues to explode. Oracle spent $28.5 billion in CAPEX this past quarter

just for some context, a year ago they spent just $8.5 billion in the same quarter. And all that spending is impacting their free cash flow. It came in that negative $5.4 billion, and the company is sitting on $125 billion in debt. So because of all that AI spending, analysts don't expect Oracle to generate free cash flow again until 2030. Now, what did catch my attention is that Oracle has come up with a pretty interesting way to reduce some of their financial burden. Oracle is now asking their customers to pay up front for data center capacity and basically moving to like a pre-order model. The company said that for some of these massive AI contracts, their customers are now

prepaying Oracle for the computing capacity or the customer it goes out and buys the GPUs themselves and gives it to Oracle to put in their data centers. So Oracle is like adopting a BIOC model, you know, bring your own chips. And you know, I think this is a smart move by Oracle because instead of them going out and borrowing billions of dollars and buying a ton of Nvidia chips, and then hoping someone rents them, the customer just signs the contract first and helps pay for the hardware upfront.

Oracle says they received $14.4 billion in customer prepayments just in the past quarter. So that's a pretty clear sign that demand for AI is not slowing down anytime soon if Oracle is able to get their customers to agree to those terms. But this does not eliminate the risk for Oracle. I mean, Oracle still has to build the data centers. They have to secure the power.

They've got to install everything and actually deliver that capacity. For now, though, the market seems like the direct, direction that Oracle was headed, and the stock is up around 7% this morning at the time of this recording. Let's talk about some stocks make kin moves today. Shares of RH are up this morning after the luxury furniture maker delivered better than expected earnings and a strong guidance. Revenues were up 2.6% to $922 million. That topped estimates of $915 million, and the company now expects full-year sales growth of 5.5% to

which was ahead of the 5.6% that Wall Street was expecting. Now, just like we've seen with other retailers, R.H. did get an earnings boost by getting $55 million in tariff refunds last quarter, and they expect to get another $13.9 million in tariff-free funds in the second half of the year. The company said they're going to use some of those refunds money to go towards offsetting unplanned supply chain costs related to rising oil prices and the conflict in the Middle East. Now, RH stock has suffered from a slow housing market. People tend to buy new furniture when they move into a new house and no one's buying houses these days. That's one reason why the stock is down 30% on the year. But shares are getting a mini bump this morning.

It's up 2% following the earnings report. Now, on the flip side, Adobe shares are falling despite reporting another earnings beat. Revenues for the quarter jumped 13% to $6.76 billion that was ahead of expectations. And adjusted earnings also beat estimates. And I got to say, there were some genuinely encouraging AI numbers from Adobe. The company said that annual reoccurring revenue from its AI first products grew more than 150% from a year ago. On top of that, they now have over 1 billion monthly active users across their platform. So those are some pretty impressive numbers, but Wall Street still wasn't convinced that Adobe will survive the AI era. You know, for years, Adobe's software like Photoshop and Premiere were

basically the industry standard, but now Adobe is facing a ton of pressures, not just from companies like Figma and Canva, but also from chat GPT, Claude, and other AI tools. So despite Adobe, continuing to beat earnings after earnings, the stock keeps dropping. It's down 25% on the year. Let's wrap the show with a fun fact. Returning stuff that you bought online is getting a lot more annoying these days. According to the Wall Street Journal, 68% of retailers now charge a return fee at least some of the time. Five years ago, that number was 43%. And the reason these retailers are doing it is because processing a return costs merchants an average of 27% of the original purchase price. So these merchants are finally cracking down with surprise mail-in fees.

Companies like Zara, H&M, Uniclo, and T.J. Max now charged between $5 to $12 to mail something back. On top of that, return windows are also getting shorter for many retailers like Macy's and Home Depot. And even Amazon is getting more aggressive about this. They now flagged products that are frequently returned, and they ask customers why they're sending stuff back and they even send notices to people who return more frequently than the typical customer. And I guess none of this should really be a surprise at this point. Free returns were basically a way for retailers to get people more comfortable buying things online. And now that everyone is totally cool with buying stuff online, I think these companies are

slowly pulling back because processing returns is expensive. At this point, I don't think people are going to stop buying things online even with more restrictive return policies. So long term, this could lead to slightly higher profit margins for these retailers. Let me know in the comments on what you guys think and how you guys feel about the whole return thing. Will these restrictive policies stop you from shopping online? Drop your thoughts on Spotify and YouTube.

Well, all right, guys, that's the rundown for today. That's the rundown for this week. Hope you guys enjoyed today's episode. By the way, no deep dive episode this weekend or interview, but we should be back to our regularly scheduled programming starting next week. Also, if you guys have like five extra seconds and want to help out the show, consider giving us a five-star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. You know, all that engagement really does help us out and it helps other people find the show.

Thank you guys so much for listening, watching, and commenting. Shout out to Mike for all the work behind the scenes. And we'll see you guys back here next week.