Oracle shares fell ahead of its Q3 earnings report, as Wall Street analysts expressed concern over the company’s AI investment costs and revenue targets. Two major firms lowered their price targets, citing questions about capital requirements and customer concentration. The stock is down significantly year-to-date despite positive developments like a bond offering and a major funding round for key client OpenAI.
Analysts on Wall Street are growing worrisome of Oracle’s upcoming earnings report, causing ORCL stock to dip. The earnings are slated for Tuesday, March 10, after the market closes.
The boom in AI demand over the past year is the catalyst for bullish expectations for Oracle’s Q3 earnings. Analysts remain optimistic about Oracle’s long-term prospects despite recent challenges, including job cuts and margin pressures from AI investments.
Specifically, two big Wall Street firms cut their forecasts for Oracle (ORCL) stock ahead of earnings. Deutsche Bank analyst Brad Zelnick cut his target from $375 to $300, while maintaining a Buy rating.
Per Zelnick, the expectation of a multi-year period of significant cash burn tied to AI expansion has raised questions about how much additional capital may eventually be required. Investors are also debating whether Oracle’s medium-term revenue ambitions are achievable.
Oracle’s cloud guidance has been difficult to predict in the past. The reliance on a small number of major customers adds another layer of uncertainty.
Oracle shares remain 54% below their September peak despite positive developments. At press time, the stock is down 22.22% year-to-date.
