Oracle shares are taking a beating on Tuesday after the company reported mixed quarterly results.
The 13% drop in the shares intraday, before recovering some losses, is putting the stock on pace for the worst day since March 2002, as tracked by Dow Jones Market Data Group.
The tech giant on Monday reported fiscal first-quarter 2024 revenue of $12.45 billion, marginally short of analysts’ $12.47 billion estimate, and its second-quarter outlook was softer than expected.
GENERATIVE AI WILL ADD TRILLIONS TO GLOBAL ECONOMY: MCKINSEY
Plus, the shares up 64% over the past 12-months, were priced for perfection.
Still, some investors think the selloff is overdone.
"Wall Street is missing something," Mark Murphy, Rosecliff founder and managing partner, said during an interview on FOX Business’ "Varney & Co." "Look at the cloud business that is the growth area," he added.
To Murphy’s point, Oracle Chief Technology Officer Larry Ellison talked about new clients that are expected to bring in billions.
"Generative AI is changing everything. As of today, AI development companies have signed contracts to purchase more than $4 billion of AI training capacity in Oracle's Generation 2 Cloud. That's twice as much AI training as we had booked at the end of the last Q4" he said.
Ellison added its Cerner Health business will be awarded two contracts worth $1 billion as well as a major deal with Warren Buffett.
"I'm now able to announce that all nine utility companies owned by Berkshire Hathaway are in the process of replacing all their existing ERP systems and standardizing on Oracle's Fusion Cloud Applications," said Ellison.
He also noted that Oracle will be expanding its partnership with Microsoft Azure Cloud Services. More details are expected later this week.
Oracle CEO Safra Catz also alluded to future growth in response to a question on the company’s earnings call about cloud momentum.
"The level of demand we have is stunning. Stunning is the only word I can use. And I don't want to get overly exuberant simply because we do have to continue to build out our systems, etc. And so, yes, a very strong momentum to the cloud," she said.
https://www.foxbusiness.com/markets/oracles-worst-day-in-21-years-may-be-overdone
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