It’s not often investors take a look at a $7 billion contract and decide that’s a reason to sell a stock or not buy it — but that’s kind of what happened to Oracle (NYSE: ORCL) last month.
Oracle shares started July trading north of $140 per share, but by the end of the month, they were trading below $130
In the meantime, in between time, on July 23, Oracle landed a Department of Defense contract potentially worth $7 billion. Oracle’s big military contract Not all at once, to be sure. As Oracle explained, its new contract under the U.S.
Department of Defense Enterprise Software Initiative (ESI) will pay out $3.3 billion over the first five years, rising to $7 billion total if extended through a full 10 years. Best case, that’s only $700 million per year, and for a company that regularly does $67.3 billion in annual sales, that’s barely a 1% increase. Still, it’s an increase, not a decrease.