- Oracle share price tumbled after its financial results.
- The company published strong numbers and boosted its guidance.
- The retreat happened as its cloud revenue came short of expectations.
Oracle stock price retreated in extended hours, continuing a strong downtrend that started on June 1, when it peaked at $250. ORCL dropped to $193, down from its closing price of $201. This retreat happened even after it published strong numbers that beat in terms of revenue and earnings per share (EPS).
Oracle Stock Drops Despite Strong Earnings and Guidance
Last week, Broadcom, a top player in the technology industry, published strong financial results and then plunged as its guidance became weaker than expected.
Today, Oracle stock retreated by over 5% in extended hours after the company published its financial results, which were strong in all aspects. Its revenue jumped by 21% to $19.1 billion, while the Remaining Performance Obligations (RPO) jumped by $85 billion to $638 billion.
RPO refers to a company’s backlog or the value of the contracted future revenue from products that a company has already sold. In Oracle’s case, most of the RPO is from its large partnership with OpenAI, the creator of ChatGPT.
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The results showed that its cloud revenue jumped by 47% to $9.9 billion, with its infrastructure segment rising by 93% to $5.8 billion. Its SaaS revenue rose by 12% to $4.1 billion. Its cloud revenue was a bit lower than what analysts were expecting.
For the year, the company made over $67 billion, up by 17%. The management expects that its revenue will grow by 29% in the current quarter, a solid number for a company that has been in the industry for decades. Its cloud revenue will grow by between 57% and 63%. In most cases, the company normally beats its guidance.
The Oracle stock price retreated after the management boosted the capital raise for the year. After raising $43 billion last year, the company plans to raise $40 billion this year through a combination of equity and debt. $20 billion of this will be through its at-the-market (ATM) raising, which will dilute its shareholders.
ORCL Stock Price Technical Analysis
The daily chart shows that the Oracle share price has pulled back in the past few days, mirroring the performance of the broader stock market. Top US indices like the Nasdaq 100 and S&P 500 have pulled back sharply in the past few days.
The stock plunged to the crucial support level of the 100-day Exponential Moving Average (EMA). It seems to be falling towards the important support level at $170, the highest point on March 11 this year. This price was the neckline of the double-bottom pattern.
Therefore, the stock will likely remain under pressure for a while and then rebound in the next few months as investors buy the dip.
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