Oracle stocks (ORCL) dropped 0.2% in Monday's premarket session, extending a sharp slide that has pulled the stock 43% lower from its June 1 high to $140.64 as of the last close. The pullback is bringing ORCL closer to the $134 support level, which has held the stock afloat in recent months and would mark the lowest level since April 2025 if breached. The decline is fueling optimism among retail traders ahead of the second-quarter earnings season, which begins this week. Stocktwits sentiment for ORCL rose over July and was rated 'bullish' on Monday, with traders viewing the current price level as a potential entry point despite heightened volatility.
Retail Traders and Analysts View ORCL as Undervalued
Retail traders on Stocktwits expressed confidence in Oracle stocks despite the recent decline. One trader stated, "$SPY $MSFT $IBM $ORCL held up very well overnight so far compared to semis," referencing the late Sunday market selloff triggered by fresh U.S. strikes on Iran in retaliation for Tehran's attack on a container ship in the Strait of Hormuz. Another trader wrote, "From a risk standpoint, this is a stock that has certainly fallen out of favor with investors, but should this support hold, could lead to a nice squeeze higher. High risk trade though as the volatility has been extreme with this stock and has a beta over 2.2." A third user said, "$ORCL any hint of positive anything this goes to the moon over $200 easy gold gold gold."
Currently, 37 of 43 analysts rate Oracle stocks 'Buy' or higher, 5 rate it 'Hold,' and 1 rates it 'Sell,' according to Koyfin. The average analyst price target of $281.85 implies a 75% upside from the stock's last close.
Oracle Faces Debt Concerns Amid Aggressive Capital Expenditure Plans
Oracle's recent decline stems from concerns over high debt and the concentration of future business with a handful of customers, chiefly OpenAI. Investors view Oracle in a risky position, especially since OpenAI has fallen behind rival Anthropic in market value and, reportedly, in annualized revenue.
Last month, Oracle reported fourth-quarter results that beat expectations and said backlog surged 363% to a record $638 billion. The company forecasts up to $95 billion in capital expenditure for fiscal 2027, following $55.7 billion in spending last fiscal. To achieve that, Oracle plans to raise $40 billion in debt and equity this fiscal year, including $20 billion through a previously announced program to sell shares in the open market. In the fiscal year just ended, Oracle raised $43 billion in debt financing and $5 billion in equity.
ORCL stock is down 28% year to date.
FAQ
What caused Oracle stocks to drop 43% from their June 1 high?
Oracle stocks dropped 43% from the June 1 high to $140.64 due to concerns over high debt levels and the concentration of future business with a handful of customers, chiefly OpenAI. Investors view Oracle in a risky position, especially since OpenAI has fallen behind rival Anthropic in market value and annualized revenue.
What is the analyst consensus on Oracle stocks?
Currently, 37 of 43 analysts rate Oracle stocks 'Buy' or higher, 5 rate it 'Hold,' and 1 rates it 'Sell,' per Koyfin. The average analyst price target of $281.85 implies a 75% upside from the stock's last close of $140.64.
How much capital expenditure does Oracle forecast for fiscal 2027?
Oracle forecasts up to $95 billion in capital expenditure for fiscal 2027, following $55.7 billion in spending last fiscal. To achieve that, Oracle plans to raise $40 billion in debt and equity this fiscal year, including $20 billion through a previously announced program to sell shares in the open market.
