Oracle shares end trading lower despite positive assessments of earnings report
Oracle shares rose 8.5% intraday on Friday, but reversed by the close and fell 1.7%. As MarketWatch reports, Wall Street analysts gave a positive assessment of the company’s quarterly report, believing it eased some investor concerns about Oracle’s spending on the development of artificial intelligence technologies.
Capital expenditure forecast
Piper Sandler analyst Billy Fitzsimmons noted that Oracle maintained its capital expenditure forecast — funds that the company directs, among other things, to data centers and equipment. Investors had feared that management would raise its forecast for such spending.
According to Fitzsimmons, the report directly addressed several key arguments made by Oracle skeptics. Bernstein analyst Mark Merdler said investor interest in the company’s shares remains high. In his view, the new report added clarity to the positive investment case for Oracle.
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Cloud segment and AI contracts
StoneX analyst Yi Fu Lee said Oracle Cloud Infrastructure posted 121% year-on-year growth. In his assessment, Oracle continues to secure large-scale contracts related to artificial intelligence, while customer demand still exceeds available capacity. Lee believes that corporate AI use is moving from experimentation to practical implementation.
J.P. Morgan analysts said that in the August quarter, the company brought online 850 megawatts of AI computing capacity — three times more than in the May quarter. They also pointed to new AI contracts worth more than $30 billion. At the same time, Morgan Stanley analyst Sanjit Singh would like to see stabilization in Oracle’s gross margin and details on the timelines for launching new data centers. The next important event for the company is expected to be its analyst day, scheduled for October.
