Oracle Falls 13.5% Post Q1 Earnings: Will ORCL Stock Sell-off Continue?
13 Setembro 2023 - 8:26AM
Finscreener.org
Oracle (NYSE:
ORCL) saw its stock fall
by 13.5% in a single trading session this week following the
announcement of the company’s fiscal Q1 results. While Oracle
surpassed earnings estimates in the quarter (ended in August), its
revenue and guidance were below consensus
estimates.
Oracle reported adjusted earnings
of $1.19 per share, slightly above the $1.15 per share analysts had
anticipated. The company
posted $12.45 billion, just shy of the predicted $12.47
billion.
Looking ahead, OracleU+02019s
guidance for its fiscal second quarter includes an adjusted net
income ranging from $1.30 to $1.34 per share and a revenue growth
of 5% to 7%. However, analysts had forecasted slightly higher
figures: $1.33 in adjusted earnings per share and a revenue of
$13.28 billion, implying an 8% growth in revenue.
On the brighter side, Oracle saw
its revenue jump 9% year over year in the fiscal first quarter
ending August 31. Furthermore, net income surged to $2.42 billion
(or 86 cents per share), a notable rise from the prior yearU+02019s
$1.55 billion (or 56 cents per share).
ItU+02019s worth mentioning that
in June 2022, Oracle finalized its significant $28.2 billion
purchase of Cerner, an electronic health record software firm. As a
result, Oracle is rapidly shifting CernerU+02019s operations to the
cloud. However, this transition has somewhat tempered the
companyU+02019s revenue growth, as pointed out by OracleU+02019s
CEO, Safra Catz, during an analyst conference call.
Oracle stock is up 31% in 2023
Despite the recent pullback,
Oracle, a titan in the tech industry, has seen its stock soar by
31% this year and by 44% over the past twelve months. The surge in
value has propelled the companyU+02019s market capitalization to an
impressive $297 billion.
Oracle’s solid performance has
meant the company’s CEO, Larry Ellison, is now among the five
wealthiest individuals in the world, according to Forbes. Ellison
isn’t just a founder according to SEC records, he is also the
principal shareholder of Oracle, boasting a 42.9% stake.
Historically, ORCLU+02019s stock
has consistently outpaced the broader market indices. Over the past
five years, factoring in dividends, the stock skyrocketed by 141%.
In comparison, the S&P 500 index rose 69% since September
2018. Extending the timeline to a decade, OracleU+02019s stock
appreciated by an astonishing 290%, a figure that stands tall
against the S&P 500U+02019s returns of 219%.
At its core, Oracle specializes
in IT products and services tailored for business enterprises. Its
suite of offerings encompasses enterprise solutions and
infrastructural tools that are deployable across various IT
models—be it traditional on-site, cloud-centric, or a blend of
both. The goal? Enhancing the efficiency, safety, dependability,
and cost-effectiveness of the clientele.
A prime example is the Oracle
Autonomous Database, which integrates machine learning to
streamline functions that once required manual intervention. Once
clients choose Oracle, they gain access to a vast portfolio of
solutions complemented by the companyU+02019s in-depth industry
know-how. Additionally, clients can opt for or renew diverse
support services related to their software licenses and hardware
setups.
ORCL stock might gain pace as it bets big on
AI
The recent surge in
OracleU+02019s stock can be attributed to its unveiling of plans to
delve into the realm of generative artificial intelligence (AI)
services aimed at its global customer base. Oracle envisions these
AI-driven solutions as transformative tools that streamline
business operations, refine decision-making processes, and amplify
customer interactions.
To bring this vision to life,
Oracle has joined forces with Cohere, a Canadian AI startup that is
a frontrunner in the large-language model (LLM) domain. Notably,
Cohere recently secured a funding boost of $270 million, which
raised its valuation to a commendable $2.2 billion. Tech
powerhouses such as Salesforce (NYSE:
CRM) and the
semiconductor leader Nvidia (NASDAQ:
NVDA) are among the
notable investors in Cohere.
Oracle has clarified that this
avant-garde AI solution will be anchored in the Oracle Cloud
Infrastructure (OCI). This ensures that Oracle can present a
comprehensive generative AI platform fortified with top-tier
security protocols and a diverse range of cloud-based
applications.
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