Oracle has lost a quarter of its value in two weeks. Should you buy its stock?
Shares of software developer Oracle have fallen by nearly 25% over the past two weeks, despite a recovery across the entire software sector. At the same time, Wall Street analysts currently hold one of the most optimistic views on the company in the past two decades.
What's Going On with Oracle
Oracle shares have come under heavy pressure and have fallen in 18 of the last 22 trading sessions. Over the past two weeks, the company has lost about a quarter of its market value.
During trading on July 6, its shares rose 2.5%, ending a nine-day losing streak—the longest since December 2021.
At the same time, Oracle’s plunge seems particularly unusual given the growth of the software development sector as a whole, Barron’s notes. The iShares Expanded Tech-Software Sector ETF has gained more than 10% over five trading days.
What Analysts Are Saying
Despite the decline, Wall Street maintains a positive outlook on the company. 84% of analysts covering Oracle recommend buying its stock—a level of optimism seen only once in the past 20 years, according to FactSet data cited by Barron’s. The average price target is $254, which implies upside potential of approximately 82% relative to the last closing price on July 2.
One of the most bullish analysts is City Panigrahi of Mizuho, who on July 2 reaffirmed a price target of $320—128% above current trading levels. The analyst included Oracle in his list of the most promising investment ideas. In his view, the company is one of the main long-term beneficiaries of the spread of AI thanks to its ecosystem, which integrates databases, cloud infrastructure, and enterprise applications. At the same time, Panigrahi warned that the company will likely need external financing to implement its large-scale investment program. It is precisely the high capital expenditures and significant debt burden that remain the main causes of investor concern and the stock’s weak performance, Barron’s notes.
KeyBanc also reaffirmed its forecasts for Oracle on June 1, according to Insider Monkey. The bank’s analysts said they are becoming “increasingly confident” that operating expense growth will remain moderate, and that this could be the key driver of further earnings growth, Barron’s reports. They maintained their “Buy” rating and a price target of $300 per share.
This article was AI-translated and verified by a human editor
