Oracle Slumps, Apple iPhone 15 Watch, Ari Emanuel on WWE + UFC = TKO 9/12/23

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Jim Cramer (0:31)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:38)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber here at Post 9 of the New York Stock Exchange. Cramer is at one market in San Francisco as Dreamforce kicks off today.

Futures soften a bit after back-to-back gains for the S&P NASDAQ. Oil near 88.5 is the highest of the year. As Becky says, the Apple event is the headliner today, 1 p.m. Eastern time this afternoon. Our roadmap begins with storm clouds for Oracle, biggest laggard on the S&P. Revenue and guidance coming in a bit lighter than expected.

David Faber (1:07)

Plus it is Apple's biggest event of the year. It is expected to unveil, of course, the iPhone 15, hoping to give the company's somewhat lagging sales a boost.

And the UFC, UFC and WWE, that merch is closing today. The new company, TKO Holdings. It will begin trading on the New York Stock Exchange and we are gonna speak with the group's CEO, Ari Emanuel and president later this hour.

Carl Quintanilla (1:32)

Let's begin with Oracle, the biggest pre-market decline around the S&P. Beats on the bottom line, but does post a revenue miss, issues some sales guidance slightly below consensus. Company did tout $4 billion in new AI capacity commitments. That's twice the amount booked at the end of the previous quarter.

Jim, this would be set to be the biggest gap down on earnings in a couple of years.

Jim Cramer (1:53)

Yeah, look, I would be a buyer, especially if it was a 113 I have a real small position for the Travel Trust. I want to get very big, and here's why.

This is a situation where the real issue is not what people are talking about. It's Cerner. It's the acquisition they made, $28 billion. It's at the end of December of 2021, and people do not like that acquisition. They don't like it because the company already guided down for it. A lot of the different mentions of it were about how we would have done better if it were not for Cerner. Cerner's got a very complicated subscription revenue recognition that has to go to another way that will be a lot less, let's say, it's going to a subscription that will be much harder to understand, and that's what people were thrown off by last night.

It is not about the slowing of the cloud, even though people said it's slowing the cloud. David, sometimes you get these situations where you have brokers that push a stock right before it reports, aggressively, and the stock goes up six, seven dollars, like this one, and people are gonna be disappointed no matter what is said, but Cerner was a surprise, the healthcare company.

David Faber (2:50)

Right, but again, and Jim, if you can explain it, please do so, the license is transitioning from Cerner to the cloud model, so it's being done rateably as opposed to bringing in the revenues ahead.

Jim Cramer (3:01)

But why didn't people understand that? That's exactly what happens, going rateably so therefore it doesn't look as good, but it was not a great quarter for Cerner, by any means. I did not think it was a good acquisition after I listened to it last night.

David Faber (3:11)

Well, I don't remember you being, well actually I don't really remember one way or the other, whether you were particularly positive on that deal or not, when it was announced back in 2021

Jim Cramer (3:20)

Remember, Epic is so much stronger than Cerner. When you go to your healthcare provider, you go to a hospital, it's almost always Epic. Cerner's always been a sloppy number two. It had been challenged a couple times by activists. No, look, I like what Oracle really is, which is this company that's transitioning the cloud. I didn't like the healthcare. And by the way, David, that deal may have been done before we realized how big AI is. Remember, think about December 21

You really weren't focused on what AI could be.

And now AI is huge, and it's kind of like Cerner's afterthought. Not great.

David Faber (3:53)

Not great.