Trading Insights 10/8/25

Chart of the Day 📈 10/8/25: Why AI Stocks Flamed Out on Oracle News

Mike Larson | Editor-in-Chief

When you have a group as hot as the AI stocks, even a drop of water can temporarily douse the flames. Yesterday, it came in the form of a media report on lackluster margins at Oracle Corp. (ORCL).

Specifically, The Information published a report suggesting ORCL’s gross margins were just 14% at its Nvidia Corp. (NVDA)-fueled cloud computing unit. The publication cited internal documents covering a recent three-month period. ORCL is building massive data centers and buying billions of dollars in NVDA chips, then turning around and renting that processing power to Artificial Intelligence companies like OpenAI.

If that business is spinning off low-double-digit margins only – compared to 70% for ORCL overall – it would suggest a couple of things are possible. First, the supply of AI computing power could be overwhelming demand. Second, costs could be rising so fast that profitability is a real problem for service providers.

Oracle Report Douses the AI Trade’s Flames

Whatever the case, the report dampened enthusiasm for AI stocks yesterday. Many Big Tech names associated with the AI boom tumbled, as you can see in the MoneyShow Chart of the Day. It shows the intraday move in shares of ORCL and NVDA, plus Microsoft Corp. (MSFT) and Meta Platforms Inc. (META), two of the biggest spenders on AI-related projects.

While this is all just “short-term stuff” for now, it does illustrate the risks inherent in trading the market’s hottest stocks. Any little piece of information – no matter what the source – can have an outsized impact on group momentum.

That matters a lot if you’re trading high-leverage vehicles like options, or if your time horizon is measured in hours or days versus weeks or months. So, if that applies to you, watch what happens the next few days carefully. If AI stocks can’t catch fire again soon, you might want to seek trading profits elsewhere to avoid getting burned.

IBD’s St. Clair: Pinpoint Winning Stock Trades with THIS Three-Step Process

Wondering how to make more money in the stock market? Investing legend William O’Neil did it better than anybody for decades — and he shared his methods when he started Investor’s Business Daily (IBD) back in 1984.

In this session from our recent MoneyShow Virtual Expo, you’ll learn how IBD’s proprietary investing methodology can help you pinpoint winning stocks, deploy a precisely-timed buy/sell strategy and manage your portfolio like a seasoned veteran. IBD Product Coach Scott St. Clair will present a three-step process you can use every day to improve your trading returns.

• QQQ and IWM: Both on the March, But Keep an Eye on Volume
  👉️ TICKERS: IWM, QQQ

  Both the generals, the Invesco QQQ Trust (QQQ), and the troops, the iShares Russell 2000 ETF (IWM), made higher highs and lower lows before closing at new all-time weekly highs recently. Yet history reminds us that even the strongest advances carry the seeds of potential exhaustion, observes Buff Dormeier, chief technical analyst at Kingsview Partners.

• GE: A Technically Attractive Aerospace Trade

  👉️ TICKER: GE

  What inning are we in for the AI revolution? We have heard many answers, but little consensus. Outside of tech, GE Aerospace (GE) looks attractive from a technical perspective, writes John Eade, president of Argus Research.

☀️ 📈 Get year-end picks and strategies at the 2025 MoneyShow/TradersEXPO Orlando (Oct. 16-18). Register TODAY!

📈 🏦 Safe, Secure, and Reliable: 3 High-Yield Dividend Stocks Built to Pay You for Life. (Barchart)