Oracle (NYSE: ORCL) stock tumbled today — along with the rest of the stock market — falling 8.7% through 1 p.m.
ET Friday, and it’s no huge mystery why
Specialty chip-maker Broadcom (NASDAQ: AVGO) reported earnings on Wednesday and, while the news was good — beats on both sales and earnings, and a forecast for 89% sales growth in Q3 — investors spooked once they realized Broadcom’s sales forecast implied sales of its artificial intelligence chips will only triple in Q3, and not grow even faster, as analysts hoped. Broadcom sold off on the news yesterday, and today the panic seems to be spreading among other tech stocks. What Broadcom’s earnings mean for Oracle Oracle has tied its future to the AI revolution, making a big bet on providing data center access to AI firms such as OpenAI, which could account for the bulk of Oracle’s revenue in future years.
It makes sense, therefore, that investors nervous about the future of AI would take out their wrath on Oracle stock today. And yet, not everyone is down on Oracle. Guggenheim still loves Oracle This morning, before all the selling started, analyst John DiFucci at investment bank Guggenheim doubled down on his “buy” rating and a $400 price target on $215 Oracle stock.