Last week felt like the Kentucky Derby of earnings season, especially if you listened to or read the earnings call transcripts of the big tech stocks I'll review below.
Last week's Market Outlook, "Intel Confirms Another Gold Mine Segment In Semiconductors," explained Intel's (NASDAQ:INTC) remarkable comeback from behind rally, which led it to finally reach its all-time high set back in 2000.
Stock moves like this are in many ways analogous to Golden Tempo's move from last to winner in the Kentucky Derby this weekend.
Even if you don't know or care about horse racing, these final 53 seconds of the race are inspiring.
In case you're wondering what a horse race has to do with picking winning stocks, in both cases, it takes the right leader with the right team in the right conditions to come out on top. Sometimes, a little bit of luck helps.
Last week was filled with explosive market action, insightful news, and new timely opportunities in market rotation.
This week's title asked, "Which Will Double First: Amazon or Oracle?"
I'd like to answer, "GOOGL", but that's not the question.
The risk manager in me wants to reply, "That's not the question you should be asking if you want the best odds of doubling your money with only these two stocks to choose from."
Finally, the tactical investor in me says, "I'd set up a trade that increases my odds of doubling my money with these two stocks, and bet on doubling it faster by picking the right one."
Before I get to the answer, let's look at the insightful news and new timely opportunities that occurred last week because they both inform the answer to the AMZN vs. ORCL challenge and a whole lot more.
Last week delivered a slew of earnings reports, including some of the most important companies at the center of the AI infrastructure buildout.
This area of the AI revolution is one of the most influential drivers of the stock market and a reason the historic rise in the price of oil and the crisis over the Strait of Hormuz appear to have been sidelined by the equity index's determination to move higher.
So I looked at the earnings report conference call transcripts of 8 companies (with the help of AI) that have recently reported earnings to analyze the state of the AI infrastructure buildout with the questions in mind that investors should be asking...
"Will it last, and if so, how big will it be?"
The AI infrastructure buildout is unlike anything we've ever experienced. Its impact is felt profoundly in more industries than most people realize, and its reach is spreading like a virus.
The scale and speed at which it can disrupt or create companies, and even entire industries, are unprecedented.
As investors, we need to distill risks from opportunities and facts from fantasy to stick with the trends that will thrive and avoid the inevitable financial disasters that occur during disruptive progress like now.
I created a report for members of our Opportunity Report service (which is free on our home page) that is too long to repeat entirely here, but I'll summarize some of it below.
Additionally, in the spirit of the power of AI, I also let Google's AI product "Notebook LM" create an incredible presentation of the report in a 15-minute podcast format.
There are many, even hundreds, of companies that are an integral part of the AI revolution, but this report intentionally focuses on companies that have reported earnings in the last several weeks and are in a position to shed light on several areas that I'll describe as themes or pillars of the AI infrastructure flywheel that provide a framework to decide...
Are we in a bubble or setting the foundation of the "roaring 2030's"?
Here are the themes:
Every one of these themes has the potential to accelerate or hinder the success of the big picture. While these flywheel themes can evolve and change over time, currently, if you look at the AI infrastructure buildout through this lens, I believe you will be able to anticipate the health of the trend.
Here's what's being said on the conference calls about Capex...
Amazon (Andy Jassy): "In times of very high growth like now, where the CapEx growth meaningfully outpaces the revenue growth, the early years' free cash flow is challenged until these initial tranches of capacity are being monetized."
Here's what was said on the conference calls about memory pricing...
- Apple (Tim Cook): "We will look at a range of options with memory costs increasing" -- leaving open the possibility of pricing actions.
- Dell (Jeff Clarke): Dell took company-wide pricing actions: server pricing changed on December 10, 2025, and PC pricing on January 6, 2026, "This notion of we recover our cost in 2/3 of it in 90 days, we moved that quickly. That's what we learned in COVID."
- Amazon (Andy Jassy): The memory dynamic is "a further impetus pushing companies who have on-premises infrastructure into the cloud."
Here's what was said on the conference calls about margins...
- "Worldwide operating income was $23.9 billion, with an operating margin of 13.1%, our highest operating margin ever." -- Brian Olsavsky, CFO, Amazon (AMZN)
- "Cloud operating income was $6.6 billion, tripling year-over-year and operating margin increased from 17.8% in the first quarter of last year to 32.9%." -- Anat Ashkenazi, CFO, Alphabet (GOOGL)
- "We've been talking about where this AI business of ours has been in the cycle compared to even the cycle we saw with cloud, which now seems very long ago, and how margins were actually better. And they've remained better in our AI business versus where we saw in cloud transition looking back." -- Amy Hood, CFO, Microsoft (MSFT)
- "Products gross margin was 38.7 percent, down 200 basis points sequentially [driven by] seasonal loss of leverage and higher memory costs." -- Kevan Parekh, CFO, Apple (AAPL)
- "ISG operating income was a record $2.9 billion up 41%, marking seven consecutive quarters of double-digit growth... Operating margin was 14.8%, up 240 basis points sequentially." -- David Kennedy, CFO, Dell (DELL)
When you look at the summary matrix below, the overarching themes become apparent.
- Capex is supported by the backlog of orders.
- The decision to make their own chips has been a big windfall for those who pursued that path.
- They're all being held back by some supply constraint.
AMZN and ORCL are both in this group of stocks, and I probably could have picked any two stocks in this group to highlight with the question "which would double first?"
As for the suggestion that, "I'd set up a trade that increases my odds of doubling my money with these two stocks, and bet on doubling it faster by picking the right one."
I'd bet that holding a position in both stocks would offer the highest odds of success that you'll double your money. Both are poised to run higher, and they're starting from very different positions.
Looking at the PRIME analysis...
- AMZN peaked in early 2025 at $242, and since then it has not been able to break through the $250 area until now. As you can see below, the green box highlights that it has broken out with all four indicators in a bullish condition. Real Motion has green dots and Triple Play Leadership and Volume Trend have good separation between the blue line over the red.
- This suggests that this breakout should run and with a consolidation that has lasted well over a year, it's ready for a big move.
- ORCL is a stock that we've been looking to turn higher for months. The trigger was the break over the 50 DMA (blue line) in price, but more importantly, the condition for the phase change breakout to be trusted is the Real Motion chart that has had its 10-DMA over its 50-DMA since early 2026.
- This break over the 50 happened with all the indicators in bullish conditions.
- Not only is ORCL turning up with a positive Real Motion Divergence, but it group of enterprise software companies that have been in an ugly bear market for months are now turning higher with Real Motion Bullish Divergences.
- Additionally, both ORCL and IGV are bouncing off their 200-week moving averages
It would not be surprising to see ORCL become a 2026 Golden Temp stock.
Keep your eye on it and the stronger trends in the IGV group.
When you have a PRIME trend with a good growth story, your trades can have the wind at their back for a long time.
Summary:
Markets pushed to fresh highs across major indexes with strong breadth, leadership, and declining volatility, keeping the overall trend firmly risk-on with only a modest overextension. However, some cracks are forming beneath the surface -- internals are softening, rates and oil remain elevated, and macro crosscurrents like a stronger yen and rising ag commodities suggest potential pressure building even as momentum persists.
- Look for continuation or mild pullback → add exposure
Mid-week
- Watch rates + oil → decide if rotation or risk trim needed