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Is Oracle Stock Losing Momentum?


Dec. 4 2020, Updated 10:52 a.m. ET

Oracle’s downward stock trend

As shown in the graph below, Oracle (ORCL) stock has fallen 7.2% in the last month and 12.1% in the last year. It is trading 3.5% higher than its 52-week low of $42.57 and 17.6% lower than its 52-week high of $53.48. The stock has fallen steeply in the last six months, particularly after the announcement of Oracle’s fiscal Q4 2018 financial results. During the quarter, its total cloud and on-premises license revenue fell 5.4% to $2.48 billion YoY (year-over-year) due to the challenging cloud market. 

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Key headwinds

Oracle’s tepid top- and bottom-line guidance for fiscal Q1 2019 has affected its stock price. Oracle expects revenue to grow 1%–3%, less than in the last four quarters.

Oracle is very slowly shifting its database to the cloud, and entered the cloud space much later than cloud leaders Microsoft (MSFT), IBM (IBM), Google (GOOGL), and Amazon (AMZN). To catch up, Oracle has accelerated its acquisitions, though their integration is delaying things. Gartner has placed Oracle in the “Niche Players Quadrant” in the IaaS[1.infrastructure-as-a-service] space, the fastest-growing cloud market. Wedbush has downgraded Oracle stock from “outperform” to “neutral” and slashed its price target to $49 from $55.

Peers’ stock performance

In the last year, Microsoft, Google, and Amazon stocks have outperformed Oracle, rising 43.1%, 21.5%, and 75.6%, respectively, driven by the strong demand for cloud computing and ongoing digitalization.


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