Oracle on Cloud 9

Hey Superheroes,

Markets are finally seeing signs the Fed might blink. U.S. core inflation rose 0.3% in August – right on expectations – boosting hopes for the first interest rate cut of the year next week. That plus a jump in jobless claims was enough to send the S&P 500 to another record high.

Meanwhile, gold continues to shine. The precious metal is up over 38% this year, briefly hitting US$3,631 an ounce as investors pile in on rate cut bets, central bank demand and rising geopolitical tension. 

Let’s dive into the week’s biggest stories.

Oracle’s Cloud Comeback

Oracle just delivered the tech world’s biggest mic drop – and made Larry Ellison the richest man on the planet.

Oracle soared nearly 40% this week after the company revealed it forecasts over US$500 billion in cloud contracts. The rally briefly pushed its market cap near US$1 trillion and sent Ellison’s fortune soaring past US$393 billion..

And no,  it’s not a typo. This was Oracle’s best trading day since 1992.

🔋 AI demand is doing the heavy lifting 

Quarterly revenue rose 12% to US$14.9 billion but it’s the backlog that’s got investors talking. Oracle said it has US$455 billion in contracted cloud revenue that hasn’t even hit the books yet – up 359% from the year before.

OpenAI signed a massive deal to use Oracle’s infrastructure for new U.S. data centres, and it’s just one of several multibillion-dollar cloud customers. Oracle is also a core partner in SoftBank’s US$500 billion Stargate AI project.

🧠 From legacy to leader

Oracle’s pivot from enterprise software dinosaur to AI-first infrastructure giant is paying off. The company now operates 66 global cloud regions and is racing to double that footprint.

The aggressive expansion has come with capex risks, but for now, markets are buying the story: Oracle is officially back in the game – and it’s playing to win.

👑 The cloud king

Ellison’s personal wealth jumped US$101 billion in a single day – the biggest one-day gain ever recorded by Bloomberg’s Billionaires Index. At one point he even became the world’s wealthiest person – though last night’s profit-taking saw him drop back down a few ranks.

With AI demand heating up and Oracle sitting at the centre of the cloud buildout, investors are wondering: just how far can this rally run?

Klarna’s Big Bang

Klarna finally listed in New York and the market couldn’t get enough of it.

Shares in the Swedish payments giant jumped 30% at the open and ended up 15% higher on debut, marking a huge turnaround for the BNPL sector. After two years of rising interest rates, regulatory heat and brutal write-downs, Klarna’s comeback is a signal the worst may be over.

The company listed at US$40 a share and closed its first day at US$45.82, with trading volumes suggesting strong institutional support. Klarna’s post-IPO valuation now sits above US$16 billion – more than double its 2022 down round.

⏪ BNPL’s full circle moment

Klarna’s listing arrives nearly 20 years after it first launched in Sweden and seven years after it adopted Afterpay’s wildly successful “pay-in-four” model. That model, born in Australia, has since gone global – with players like Affirm, Zip, PayPal and Sezzle all joining the party.

Additionally, the BNPL concept has always appealed to younger shoppers who want interest-free flexibility and a cleaner alternative to traditional credit cards. Klarna now has more than 111 million active users and processed over US$112 billion in transaction volume ahead of the float.

🔋 Gen Z is driving the trend

According to Afterpay’s 2025 survey, just 27% of Gen Z use credit cards – compared to 59% of Baby Boomers. Around 76% of Gen Z say credit cards give them anxiety. BNPL platforms like Klarna and Afterpay are tapping into that sentiment, offering short-term instalments with built-in spending limits.

It’s a behavioural shift and Klarna’s IPO shows investors are starting to back it again.

🚀 Profitable(ish) and growing

Klarna’s recent financials show the platform is now breaking even and starting to eke out a small operating profit. Its bad debts remain under 1% of sales and its average transaction book turns over more than 15 times a year.

Analysts say Klarna’s scale, data and user behaviour insights give it a big advantage over credit card rivals. It also acts as a shopping directory, sending traffic to nearly 800,000 retail partners globally.

Still, the sector isn’t without critics. BNPL has faced volatility, legal loophole claims and scrutiny over whether it encourages unhealthy spending. But the Klarna float suggests public markets are warming up again and investors might be ready to swipe right on BNPL 2.0.

🔦  Some other things we’re shining the Spotlight on:

TARIFF-IED OF THE IPHONE 17?: Apple unveiled its new iPhone 17 lineup this week but all eyes were on Washington. The launch comes as Trump’s 25% tariffs on China-made iPhones threaten price hikes, with analysts tipping US$50 to US$100 increases on some models. Apple has pledged hundreds of billions in U.S. investment to soften the blow, but price rises may be unavoidable.

PILL WARS: Mayne Pharma (ASX:MYX) plunged 13% after takeover suitor Cosette Pharmaceuticals clashed with the company over FIRB disclosures. Mayne denies it plans to close its SA facility and says it wasn’t informed of government concerns. The deal is now before the Supreme Court, as both sides fight over whether Cosette can walk away from its $672 million bid.

DOWNER BUT NOT OUT: Downer EDI (ASX:DOW) and Ventia (ASX:VNT) landed a combined A$5.75 billion in defence contracts despite being sued by the ACCC over alleged price-fixing. The contracts cover maintenance, cleaning and catering across dozens of defence sites, even as both firms continue to deny wrongdoing.

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