Oracle is set to report its latest quarterly results after the closing bell Tuesday. Traders anticipate the event could lead to a big move in the cloud computing giant's stock.
Shares of Oracle moved lower on Thursday as broader US markets declined and investors focused on the company's upcoming fiscal third-quarter results. At the time of writing, Oracle stock was down around 2% at $148.60.
Oracle's stock has been pressured over concerns about whether its AI spending will yield the necessary returns.
ORCL heads into fiscal Q3 earnings with AI launches, soaring cloud momentum and expanding OCI capacity that may help fuel revenue and EPS growth.
Wall Street is turning increasingly bullish on three AI infrastructure plays heading into a busy earnings stretch, with analysts raising price targets on Micron Technology ( NASDAQ:MU ), Oracle ( NYSE:ORCL ) and Semtech ( NASDAQ:SMTC ) on the back of accelerating AI infrastructure demand.
Oracle faces a challenging setup ahead of 3QFY26 earnings, with risk-reward skewed to the downside despite recent multiple compression. We see higher risk around Oracle on expanding RPO requiring more CapEx spend for the year. Headlines from the past three months, including layoffs, elevated debt insurance costs, and abandoned data center plans, highlight execution risks as Oracle transitions to a more capital-intensive model.
At approximately $152.96 per share, Oracle stock (ORCL) is trading around 53% below its 52-week high.
The S&P 500 Index continued its strong downward trend last week, reaching its lowest level since December 17 last year. It ended the week at $6,740, down substantially from the year-to-date high of $7,000.
Last week offered a clear split in the data center and AI infrastructure trade. Oracle held its ground and then some, rising on AI cloud momentum and an analyst upgrade.
Oracle reportedly planning massive layoffs involving thousands of employees as AI spending creates cash crunch. Job cuts could reportedly affect 18% of total workforce.
Inflation will be in the spotlight this week.
Last year, Oracle ( NYSE:ORCL ) announced a massive, $500 billion data center project in Texas that signed on major AI stocks as partners.