William Blair Upgrades Oracle to Outperform
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 12 2024
0mins
Source: Benzinga
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 140.270
Low
180.00
Averages
309.59
High
400.00
Current: 140.270
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Oracle Shares Plunge 35% Amid Disappointing Earnings
- Significant Stock Decline: Oracle's shares plummeted 35% in June, now down 56% from their highs, indicating investor disappointment with earnings results and a resulting decline in confidence regarding future profitability.
- Cloud Infrastructure Transition: Oracle has shifted its focus to cloud infrastructure over the past few years, with cloud infrastructure revenue soaring 92% to $5.8 billion; however, overall cloud expenses are rising faster than revenue, leading to only a 13% increase in operating income.
- Cash Flow and Debt Concerns: Over the last 12 months, Oracle has burned $24 billion in free cash flow and plans to raise $40 billion this fiscal year to fund infrastructure expansion, with over $100 billion in debt raising investor anxiety about financial stability.
- Intensifying Market Competition: While Oracle has secured significant contracts with AI firms like OpenAI, resulting in $638 billion in remaining performance obligations, its strategy of underbidding competitors may jeopardize long-term profitability, leading investors to adopt a cautious outlook on its future performance.
See More
Surge in Options Trading Volume for Oracle and Western Digital
- Oracle Options Volume: Oracle Corp saw options trading volume of 178,777 contracts, equivalent to approximately 17.9 million shares, representing about 55.4% of its average daily trading volume of 32.3 million shares over the past month, indicating strong market interest in its future performance.
- High Call Option Activity: Within Oracle, the $150 strike call option has traded 12,344 contracts today, representing around 1.2 million underlying shares, reflecting a strong bullish sentiment among investors regarding its stock price potential.
- Western Digital Options Activity: Western Digital Corp experienced options trading volume of 58,688 contracts, equivalent to approximately 5.9 million shares, which is about 54.9% of its average daily trading volume of 10.7 million shares over the past month, showcasing active trading in its stock.
- Increased Put Option Trading: For Western Digital, the $200 strike put option has seen a trading volume of 5,494 contracts today, involving approximately 549,400 shares, indicating investor concerns about potential downside risks in its stock price.
See More
Piper Sandler Defends Oracle's Cloud Revenue Outlook
- Cloud Infrastructure Revenue Potential: Piper Sandler's analysis suggests Oracle could generate approximately $2.2 billion in Oracle Cloud Infrastructure (OCI) revenue, exceeding consensus estimates, based on capital expenditure to data center capacity conversion, indicating strong growth potential in the cloud market.
- Financial Performance Outlook: Analyst Billy Fitzsimmons noted that despite challenges around capital requirements, AI monetization, and customer concentration, the accelerating growth of OCI and the new CFO's prudent guidance are expected to positively impact the apps business in FY27, enhancing market confidence.
- Capacity Expansion Expectations: Piper Sandler estimates that Oracle could add approximately 2,400 megawatts of cloud computing capacity in fiscal 2027, based on a baseline cost of $46 million per megawatt and IaaS revenue of $13.5 million per megawatt, showcasing the company's expansion potential in cloud infrastructure.
- Growth Momentum Analysis: With projected OCI revenue reaching $41.1 billion in FY27, compared to the current estimate of $20.8 billion, Piper Sandler believes this represents a 12% tailwind for OCI growth, and despite Oracle shares pulling back after fourth-quarter results, the analysis suggests this presents a buying opportunity.
See More
NASDAQ 100 Pre-Market Update Highlights Active Stocks
- Market Performance: The NASDAQ 100 Pre-Market Indicator rose by 326.19 points to 29,655.4, indicating a rebound in investor confidence that may drive increased trading activity.
- Active Stocks: Seer, Inc. (SEER) increased by $0.59 to $2.21 with a trading volume of 9,113,701 shares, reflecting strong performance following a 52-week high recorded in the previous session.
- Nokia's Performance: Nokia Corporation (NOK) rose by $0.4201 to $12.49 with 6,146,039 shares traded, and the current mean recommendation is in the 'buy range', suggesting optimistic market sentiment regarding its growth prospects.
- Oracle Earnings Outlook: Oracle Corporation (ORCL) gained $3.5766 to $143.85, with six upward revisions in earnings forecasts over the past four weeks, projecting an EPS of $1.39 for the fiscal quarter ending August 2026, indicating positive market expectations for its future performance.
See More
Crusoe Negotiates $3 Billion Funding to Expand AI Infrastructure
- Funding Target: Crusoe is negotiating to raise $3 billion, with an expected post-funding valuation of $30 billion, tripling its previous valuation of $10 billion last year, indicating strong growth potential in the AI computing market.
- Infrastructure Expansion: Currently, Crusoe holds nearly 5 gigawatts of contracted computing power and has over 40 gigawatts in its project pipeline, sufficient to power approximately 30 million U.S. households, showcasing its strategic positioning amid surging global AI demand.
- Client Base: Major tech companies like Meta, Microsoft, and Google are purchasing capacity from Crusoe, with recent deals signed for data centers in Texas and Missouri, further solidifying its leadership in the AI computing sector.
- Strategic Shift: Crusoe's pivot from Bitcoin mining to AI infrastructure, following the sale of its Bitcoin business to NYDIG last year, demonstrates the company's keen insight and strategic adjustment to meet future AI computing demands.
See More
Bloom Energy's Stock Surge and Future Outlook
- Stock Surge: Bloom Energy's stock has skyrocketed by 1,100% over the past year and over 250% year-to-date, reflecting strong market demand and investor confidence, although current prices may not create new millionaires.
- Strategic Partnership Expansion: Bloom's AI infrastructure relationship with Brookfield Asset Management has expanded from $5 billion to $25 billion, which, while not a direct revenue commitment, creates more sales potential for Bloom's energy servers and strengthens its market position.
- Importance of Financing Framework: The Brookfield agreement is a financing framework rather than a purchase order, meaning it provides funding support for Bloom but does not guarantee direct revenue flow, necessitating efficient execution from Bloom to achieve long-term gains.
- Cautious Market Outlook: Despite strong demand for Bloom's energy servers, the transition from demand to actual revenue is complex, and given project timelines and financing structures, investors should remain cautious and avoid excessive optimism.
See More
Oracle Shares Plunge 35% Amid Disappointing Earnings
- Significant Stock Decline: Oracle's shares plummeted 35% in June, now down 56% from their highs, indicating investor disappointment with earnings results and a resulting decline in confidence regarding future profitability.
- Cloud Infrastructure Transition: Oracle has shifted its focus to cloud infrastructure over the past few years, with cloud infrastructure revenue soaring 92% to $5.8 billion; however, overall cloud expenses are rising faster than revenue, leading to only a 13% increase in operating income.
- Cash Flow and Debt Concerns: Over the last 12 months, Oracle has burned $24 billion in free cash flow and plans to raise $40 billion this fiscal year to fund infrastructure expansion, with over $100 billion in debt raising investor anxiety about financial stability.
- Intensifying Market Competition: While Oracle has secured significant contracts with AI firms like OpenAI, resulting in $638 billion in remaining performance obligations, its strategy of underbidding competitors may jeopardize long-term profitability, leading investors to adopt a cautious outlook on its future performance.
See More
Surge in Options Trading Volume for Oracle and Western Digital
- Oracle Options Volume: Oracle Corp saw options trading volume of 178,777 contracts, equivalent to approximately 17.9 million shares, representing about 55.4% of its average daily trading volume of 32.3 million shares over the past month, indicating strong market interest in its future performance.
- High Call Option Activity: Within Oracle, the $150 strike call option has traded 12,344 contracts today, representing around 1.2 million underlying shares, reflecting a strong bullish sentiment among investors regarding its stock price potential.
- Western Digital Options Activity: Western Digital Corp experienced options trading volume of 58,688 contracts, equivalent to approximately 5.9 million shares, which is about 54.9% of its average daily trading volume of 10.7 million shares over the past month, showcasing active trading in its stock.
- Increased Put Option Trading: For Western Digital, the $200 strike put option has seen a trading volume of 5,494 contracts today, involving approximately 549,400 shares, indicating investor concerns about potential downside risks in its stock price.
See More
Piper Sandler Defends Oracle's Cloud Revenue Outlook
- Cloud Infrastructure Revenue Potential: Piper Sandler's analysis suggests Oracle could generate approximately $2.2 billion in Oracle Cloud Infrastructure (OCI) revenue, exceeding consensus estimates, based on capital expenditure to data center capacity conversion, indicating strong growth potential in the cloud market.
- Financial Performance Outlook: Analyst Billy Fitzsimmons noted that despite challenges around capital requirements, AI monetization, and customer concentration, the accelerating growth of OCI and the new CFO's prudent guidance are expected to positively impact the apps business in FY27, enhancing market confidence.
- Capacity Expansion Expectations: Piper Sandler estimates that Oracle could add approximately 2,400 megawatts of cloud computing capacity in fiscal 2027, based on a baseline cost of $46 million per megawatt and IaaS revenue of $13.5 million per megawatt, showcasing the company's expansion potential in cloud infrastructure.
- Growth Momentum Analysis: With projected OCI revenue reaching $41.1 billion in FY27, compared to the current estimate of $20.8 billion, Piper Sandler believes this represents a 12% tailwind for OCI growth, and despite Oracle shares pulling back after fourth-quarter results, the analysis suggests this presents a buying opportunity.
See More
NASDAQ 100 Pre-Market Update Highlights Active Stocks
- Market Performance: The NASDAQ 100 Pre-Market Indicator rose by 326.19 points to 29,655.4, indicating a rebound in investor confidence that may drive increased trading activity.
- Active Stocks: Seer, Inc. (SEER) increased by $0.59 to $2.21 with a trading volume of 9,113,701 shares, reflecting strong performance following a 52-week high recorded in the previous session.
- Nokia's Performance: Nokia Corporation (NOK) rose by $0.4201 to $12.49 with 6,146,039 shares traded, and the current mean recommendation is in the 'buy range', suggesting optimistic market sentiment regarding its growth prospects.
- Oracle Earnings Outlook: Oracle Corporation (ORCL) gained $3.5766 to $143.85, with six upward revisions in earnings forecasts over the past four weeks, projecting an EPS of $1.39 for the fiscal quarter ending August 2026, indicating positive market expectations for its future performance.
See More
Crusoe Negotiates $3 Billion Funding to Expand AI Infrastructure
- Funding Target: Crusoe is negotiating to raise $3 billion, with an expected post-funding valuation of $30 billion, tripling its previous valuation of $10 billion last year, indicating strong growth potential in the AI computing market.
- Infrastructure Expansion: Currently, Crusoe holds nearly 5 gigawatts of contracted computing power and has over 40 gigawatts in its project pipeline, sufficient to power approximately 30 million U.S. households, showcasing its strategic positioning amid surging global AI demand.
- Client Base: Major tech companies like Meta, Microsoft, and Google are purchasing capacity from Crusoe, with recent deals signed for data centers in Texas and Missouri, further solidifying its leadership in the AI computing sector.
- Strategic Shift: Crusoe's pivot from Bitcoin mining to AI infrastructure, following the sale of its Bitcoin business to NYDIG last year, demonstrates the company's keen insight and strategic adjustment to meet future AI computing demands.
See More
Bloom Energy's Stock Surge and Future Outlook
- Stock Surge: Bloom Energy's stock has skyrocketed by 1,100% over the past year and over 250% year-to-date, reflecting strong market demand and investor confidence, although current prices may not create new millionaires.
- Strategic Partnership Expansion: Bloom's AI infrastructure relationship with Brookfield Asset Management has expanded from $5 billion to $25 billion, which, while not a direct revenue commitment, creates more sales potential for Bloom's energy servers and strengthens its market position.
- Importance of Financing Framework: The Brookfield agreement is a financing framework rather than a purchase order, meaning it provides funding support for Bloom but does not guarantee direct revenue flow, necessitating efficient execution from Bloom to achieve long-term gains.
- Cautious Market Outlook: Despite strong demand for Bloom's energy servers, the transition from demand to actual revenue is complex, and given project timelines and financing structures, investors should remain cautious and avoid excessive optimism.
See More
