Bank of America revisits Oracle stock price target after post-earnings selloff

Shares of Oracle (ORCL) tumbled 8.53% connected June 11 arsenic investors are acrophobic astir the company's plans to rise much wealth to money its AI buildout, overshadowing better-than-expected fiscal fourth-quarter results and a higher nett outlook announced a time earlier.

On June 10, the 49-year-old unreality and database bundle elephantine reported adjusted net of $2.03 per share, topping analysts' estimates of $1.96 per share. Revenue roseate 21% twelvemonth implicit twelvemonth to $19.18 billion, somewhat up of the $19.10 cardinal expected by analysts.

Oracle maintained its fiscal 2027 gross guidance of $90 cardinal and raised its adjusted net per stock forecast to $8.05. Wall Street was expecting net of $8.01 per stock and gross of $88.9 billion, according to CNBC.

For the fiscal archetypal quarter, Oracle forecast adjusted net of $1.72 to $1.76 per stock and gross maturation of 27% to 29%. Analysts were expecting net of $1.68 per stock and gross of $19.06 billion, which implies astir 28% growth.

Oracle’s financials suggest increasing concerns

Oracle's maturation communicative is raising concerns astir backing and currency flow.

The company's remaining show obligations (RPO) soared 363% to $638 cardinal past quarter, topping the $595.67 cardinal mean expert estimate. RPO reflects aboriginal contracted gross and is simply a beardown indicator of maturation momentum. Investors are disquieted astir its conversion to existent gross amid precocious spending.

Another large interest is Oracle's currency levels and debt-raising. Oracle has been leaning connected the indebtedness marketplace to money its buildout, and investors are disquieted whether Oracle's AI investments volition present returns that warrant the funding.

Oracle already raised $43 cardinal successful indebtedness financing and $5 cardinal successful equity financing successful fiscal 2026. The institution said it expects to rise different $40 cardinal done indebtedness and equity financing successful fiscal 2027, including a antecedently announced $20 cardinal stock sale.

Two months ago, Oracle laid disconnected 30,000 employees.

Related: Goldman Sachs doubles down connected banal marketplace outlook for 2026

For the full fiscal twelvemonth 2026, Oracle’s escaped currency travel was antagonistic $23.7 cardinal arsenic it "continued to execute connected investments to enactment the maturation of its Cloud Infrastructure business," the institution said successful a statement.

Wall Street expects Oracle’s dense information halfway spending to propulsion its currency travel antagonistic successful the coming years. The investments whitethorn not wage disconnected until astir 2030, according to Bloomberg data.

Bank of America remains bullish connected Oracle stock

Despite the post-earnings selloff, Bank of America reiterated its bargain standing and $240 terms people connected Oracle stock, according to a probe enactment sent to TheStreet.