Oracle Stock Falls Amid AI Sector Decline; Analysts Eye Next Moves.

Oracle stock declined by over 6% on Friday, mirroring a broader pullback in AI stocks. The company's stock price fell to 225.12 in afternoon trades. While there is no specific reason for Oracle's decline, it is likely related to the overall market trend of AI stocks trading lower.

Oracle (ORCL) stock tumbled on Friday, mirroring a broader pullback in AI stocks. The company's stock price fell to $225.12 in afternoon trading, marking a more than 6% decline. While there is no specific catalyst for Oracle's decline, it is likely related to the overall market trend of AI stocks trading lower [1].

The decline is driven in part by a so-so week for chipmakers, who have been the top early beneficiaries of AI enthusiasm. Top AI stock Nvidia (NVDA) is set to close the week lower after the chipmaker reported earnings late Wednesday. Chipmaker Marvell Technology (MRVL) disappointed investors with its sales forecast late Thursday. Additionally, a reported move from Alibaba Group (BABA) to produce its own AI chip in China is also weighing on AI stocks in the U.S. [1].

Oracle is investing billions to build data centers filled with systems, equipped with advanced AI chips, that it will rent to companies such as OpenAI, through its Oracle Cloud Infrastructure business. So investors are sensitive to any indications about enterprise demand for AI [1].

It is a down day overall for shares of companies that provide enterprise data software tools. Data software company Elastic (ESTC) is down slightly in Friday trading despite initially rallying more than 20% following a strong fiscal Q1 earnings report Thursday night. Shares of MongoDB (MDB) — a challenger to Oracle in enterprise database software — are also pulling back Friday following a rally earlier this week [1].

Oracle's gains will be tested early next month. The tech giant is expected to report fiscal first quarter results. Oracle's quarter ends with August. The company hasn't yet announced a date the results will publish [1].

UBS analyst Karl Keirstead reiterated a buy rating for Oracle stock in a note to clients Friday. But he acknowledged there is a lot of debate among investors about Oracle stock. "The bear case on Oracle shares remains rooted in concerns about margin erosion, OpenAI customer concentration and the likelihood of negative cash flow over the next few years," Keirstead wrote. "We share these concerns but conclude they'll be trumped by the revenue growth acceleration and operating income dollar growth" [1].

References:
[1] https://www.investors.com/news/technology/oracle-stock-orcl-news-ai-nvda/?mod=newsviewer_click&refcode=aflMarketWatch&src=A00619
[2] https://sherwood.news/markets/oracle-tumbles-in-broad-pullback-for-ai-trade/
[3] https://www.ainvest.com/news/3-breakout-growth-stocks-ai-boom-amd-broadcom-nvidia-2508/