Oracle (ORCL) shares fell approximately 5% on Tuesday, marking a third consecutive session of declines as rising global bond yields and renewed inflation worries weighed on technology stocks. The broader market also retreated on the first trading day of September, with the S&P 500 down 0.3%, the Nasdaq Composite losing 0.5%, and the Dow Jones Industrial Average slipping 221 points, or 0.4%.
The yield on the 10-year U.S. Treasury climbed to levels not seen since January 2025, while Japan's 10-year government bond yield reached its highest point since August 1996 and Germany's benchmark yield hit a level last observed in 2011. Stocks later pared some losses as upward pressure on yields eased.
Oracle's recent underperformance
Oracle shares have been under pressure for several months, down about 4% over the past six months. The stock's decline has been steeper than most large-cap technology peers, with a peak-to-trough drawdown of more than 50% within a 30-to-40-day window, according to Citi. The move was described as four to five standard deviations relative to historical volatility.
On Tuesday, TD Cowen lowered its price target on Oracle to $240 from $300 while maintaining a Buy rating, ahead of the company's analyst day scheduled for October 28. The firm expects cloud computing to be the central theme and anticipates Oracle will issue updated fiscal 2030 targets.
Upcoming earnings and analyst expectations
Oracle's next major catalyst is its quarterly earnings report, expected between September 10 and 15. Analysts project earnings per share of $1.67, up from $1.47 a year earlier, with revenue expected to reach $19.13 billion compared with $14.93 billion in the prior-year period.
Citi opened a positive catalyst watch on Oracle last week, arguing that the recent selloff could provide an entry point ahead of earnings and the October investor day. The bank noted an "opportunity after one of the most extreme dislocations and drawdowns in the stock's history," attributing part of the pressure to investor capitulation and technical selling factors, including credit spreads and at-the-market equity issuance.
Cloud demand as a potential catalyst
Citi also pointed to recent updates from neocloud providers as a potentially positive read-through for Oracle. Strong demand is driving pricing and margin improvements for those companies, and Oracle could see similar benefits from newly signed contracts. Oracle added more than $85 billion in sequential backlog in its May quarter, compared with roughly $9 billion added by the neocloud providers referenced by Citi.
That backlog growth could become a key focus when Oracle reports results later this month, particularly as investors assess whether the company's cloud business can offset recent stock pressure. For shareholders, the combination of September earnings and the October analyst day creates two near-term tests for Oracle's cloud growth outlook.
Meanwhile, the sharp decline has left analysts divided between concerns over valuation and expectations for a recovery. Some see the stock's recent rebound from lows as a sign of stabilizing sentiment, while others remain cautious about competitive pressures on cloud margins. The upcoming earnings and analyst day will likely provide more clarity on Oracle's trajectory.
This article is for informational purposes only and does not constitute financial advice.
