Oracle Corp. (ORCL)

Shares of Oracle Corp. (ORCL) dropped by 12.44% from $115.13 to $100.81 in the trading on Tuesday, December 12, 2023. The reason why ORCL down today is due to the mixed results reported for the company's second quarter of the current fiscal year, ending November 30.

• Mixed Q2 Results: Oracle's second-quarter results showed non-GAAP (adjusted) earnings per share of $1.34 on revenue of $12.94 billion. While the company's profit exceeded the average analyst estimate, sales fell short by $110 million compared to Wall Street's expectations.
• Concerns Over Cloud Growth: One key concern among investors is Oracle's cloud services and license support revenue, which increased by only 12% year over year in the quarter, reaching $9.6 billion. This growth rate is significantly lower than what leading cloud players like Amazon, Microsoft, and Alphabet are achieving. Wall Street is apprehensive that Oracle may struggle to catch up in this competitive space.

Shares of Oracle Corporation (ORCL) dropped by 5.99% from $108.34 to $101.85 in the trading on Friday, October 20, 2023. The reason why ORCL stock down is due to concerns raised by JPMorgan Chase regarding the growth of its Oracle Cloud Infrastructure (OCI) business in the current fiscal year amidst the artificial intelligence (AI) boom:

• Growth Concerns: Oracle, known for its cloud computing and legacy tech, was seen as a potential beneficiary of the AI boom, particularly with strong growth in its cloud infrastructure division. The company had also been building superclusters with Nvidia chips. However, JPMorgan's note cast doubt on the growth prospects.
• Conversion and Revenue Assumptions: JPMorgan expressed skepticism about the consensus assumptions concerning the conversion of bookings into revenue, suggesting they might be overly optimistic. The bank also noted that none of the current $4 billion AI backlog is expected to materialize in the current fiscal year, which is in its second quarter.
• Previous Downgrade: JPMorgan had previously downgraded Oracle's stock to "neutral" in September, citing signs of peaking cloud growth and a fair valuation at the time.
• Supply Bottleneck: Oracle has been facing a supply bottleneck as demand for its AI solutions has been surpassing available capacity. While this signifies strong demand, it has led to unfulfilled orders, impacting the company's ability to capitalize on the AI tailwind.
• Revenue Impact: Despite the optimism earlier in the year, the AI-related revenue impact on Oracle has been limited so far. In the fiscal first quarter, the company reported overall revenue growth of a modest 9%.

Shares of Oracle (ORCL) were falling 13.50% to $109.61 today as the company reported fiscal first-quarter results that were essentially in line with estimates, but slowing cloud growth led the stock to sell off.

https://www.fool.com/investing/2023/09/12/why-oracle-stock-took-a-dive-today/