Oracle Corp. shares fell nearly 10% in pre-market trading on Thursday even after the company beat Wall Street expectations for fiscal fourth-quarter (Q4) earnings, raising concerns over a $20 billion equity and debt capital raise. Analysts emphasized that the drop reflects investor caution over funding plans rather than the company’s strong underlying performance.
Oracle reported Q4 earnings of $2.11 per share on revenue of $19.2 billion, surpassing analyst estimates of $1.96 per share and $19.1 billion in revenue. Revenue grew 21% year over year, while net income increased to $4.22 billion from $3.43 billion in the prior year. Cloud offerings revenue rose 47% to $9.91 billion, driven in part by AI-related contracts and growing customer adoption.
Guggenheim urged investors to “aggressively” buy Oracle shares, maintaining a $400 price target and buy rating, highlighting an $85 billion increase in remaining performance obligations (RPO) to $638 billion. The firm noted that the results indicate lower customer concentration and strong confidence in Oracle’s growth as new capacity comes online.
Bernstein raised its price target to $325 while keeping an outperform rating, stating that the company continues to execute toward its fiscal 2030 targets without major issues. Analysts observed that the post-earnings selloff appears linked to investor concerns over capital expenditures and the upcoming fiscal 2027 capital raise rather than quarterly performance.
Piper Sandler highlighted Oracle’s AI-driven cloud growth and maintained confidence in management’s ability to protect margins amid rising costs. Jim Cramer added on X that Oracle’s backlog was “gigantic” while noting that funding and spending plans are manageable and do not justify a sharp drop in the stock. Citi described the report as mixed due to margin pressures for fiscal 2027 but emphasized more positives than negatives and reiterated a buy rating with a $330 price target.
Oracle said that demand for cloud infrastructure drove the surge in RPO and revenue growth during Q4 and announced plans to launch an AI-powered version of its Cerner patient care system. The company expects double-digit growth for Oracle Health in fiscal 2027 and sees AI transforming healthcare by improving patient outcomes, lowering costs, accelerating drug development, and streamlining clinical trials and regulatory approvals.
For fiscal 2027, Oracle projects $70 billion in capital expenditures, excluding $20–25 billion in prepayments from customers, and plans to bring online roughly one gigawatt of computing power, equivalent to total capacity for fiscal 2026. Analysts highlighted that over 50% of the RPO increase is tied to AI contracts, including partnerships with OpenAI, reducing the capital required for new data centers.
Despite the stock drop, analysts maintain a positive long-term view, citing strong RPO growth, cloud adoption, and AI-related expansion as indicators of future profitability and investor value.