Oracle Corporation shares dropped nearly 10% in premarket trading on Thursday, a sudden selloff that occurred despite the software giant delivering fourth-quarter financial results that topped Wall Street expectations.
The company reported adjusted earnings of $2.11 per share on revenue of $19.18 billion for the quarter. Analysts had projected earnings of $1.96 per share on revenue of $19.1 billion.
Despite the top-line numbers, investor anxiety was focused heavily on Oracle’s infrastructure spending and a total cloud revenue miss, which came in at $9.91 billion against the $9.99 billion expected. The company announced elevated capital expenditure plans alongside a planned fiscal 2027 capital raise. Analysts noted that the massive capital commitments required to support artificial intelligence infrastructure are weighing on short-term sentiment, even as long-term backlogs build.
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Wall Street institutions urged investors to look past the immediate market reaction. Guggenheim maintained its buy rating and a $400 price target, advising clients to buy the shares aggressively during the dip. The company also emphasized that Oracle’s remaining performance obligations, a key metric for future contracted revenue, jumped by $85 billion to a total of $638 billion, anchored by major cloud demand.
Citigroup called Oracle’s fourth-quarter report mixed, noting that while results topped expectations, its fiscal 2027 earnings outlook faces near-term gross margin pressure. Still, the firm stated it sees more positives than negatives due to Oracle’s financial discipline, reiterating its buy rating with a $330 price target. Bernstein also raised its price target to $325 from $319, pointing out that Oracle continues to execute toward its fiscal 2030 targets.
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Oracle executives explained that the underlying business momentum to insatiable demand for its cloud infrastructure platform. To sustain this trajectory, management revealed plans to deploy an artificial intelligence-driven version of its Cerner patient care system, predicting the integration will help accelerate health unit revenue growth into double digits by fiscal 2027.
The drop dragged on other major enterprise software names, with Salesforce stock slipping 1.28% to $168.80, trading near its 52-week lows. While Salesforce recently reported solid earnings, its stock has faced pressure amid broader market rotation out of software-as-a-service companies, driven by fears that increasingly capable AI models could erode demand for traditional seat-based enterprise software subscriptions. Retail sentiment on trading platforms like Stocktwits remained highly bullish during the drop, with commentators suggesting Oracle faces a capacity shortage rather than a lack of market demand.