What Microsoft Could Teach Oracle

Was it something they said? Oracle shares fell 7% on Friday, a day after the software and cloud firm offered investors bullish growth projections for the next five years, both for revenue and for profits. In Oracle’s ideal world, those projections would have put to rest concerns about the cost of its artificial intelligence cloud expansion, which is driving the revenue growth. But as we noted on Thursday, the projections lacked plenty of key details, such as expected gross margins for the whole company and how much capital spending Oracle expects to undertake in the next few years. Those gaps might have undermined its arguments a bit.

Still, the stock remains 20% above the level it was trading at on Sept. 9, right before the company issued projections about the enormous growth its AI cloud business will enjoy through 2030 (projections it has now revised upward). Among the bulls on the stock is TD Cowen analyst Derrick Wood, who appeared on The Information’s TITV on Friday, noting that the 2030 earnings per share projection was well above what Wall Street was expecting. He suggested the sell-off might have reflected the fact that the fiscal 2028 EPS projection was lower than what analysts were expecting. But Oracle doesn’t exist in a vacuum—and some investors are comparing its AI cloud expansion to Microsoft’s.