Oracle Corporation (ORCL) saw its shares plummet by 5% in Thursday's intraday trading, following a target price cut by Melius Research. The significant drop comes despite recent positive outlooks on the company's growth prospects, highlighting the market's sensitivity to analyst actions.
Melius Research reduced its target price for Oracle from $188 to $180, potentially triggering a sell-off among investors. This adjustment appears to have overshadowed recent optimistic views on Oracle's future, including the company's ambitious 2029 revenue target of $104 billion, which implies an acceleration in annual revenue growth to approximately 16% from current levels of 9-10%.
Interestingly, the stock's decline contrasts with recent positive sentiment from some investment firms. Artisan Global Opportunities Fund, in its fourth quarter 2024 investor letter, highlighted Oracle as a notable addition to their portfolio. The fund cited Oracle's potential profit cycle driven by its faster-growing business units, particularly Oracle Cloud Infrastructure (OCI) and its software-as-a-service (SaaS) segment. However, it seems that the market is currently prioritizing near-term concerns over long-term growth prospects.