Microsoft's Cloud Leasing Talks with Oracle Collapse, Shares Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Stock Price Decline: Microsoft's shares fell nearly 4% following the collapse of leasing talks with Oracle, indicating market concerns over its cloud business expansion and potentially impacting investor confidence.
- Negotiation Breakdown Reasons: Reports suggest that discussions failed due to security and compliance issues, as Oracle was unwilling to incorporate the Federal Risk and Authorization Management Program (FedRAMP) into its standard public cloud, which is crucial for handling sensitive government data.
- Market Demand Challenges: Despite both Microsoft and Oracle actively building out cloud capabilities, a significant capacity bottleneck exists due to the high resource demands of artificial intelligence, posing challenges for future growth for both companies.
- Partnership Statement: An Oracle spokesperson emphasized the ongoing collaborative relationship with Microsoft in cloud infrastructure, stating that while the negotiations did not succeed, both companies are still exploring other avenues for cooperation.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 378.910
Low
500.00
Averages
631.36
High
678.00
Current: 378.910
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
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.
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