Oracle Falls 5.2% After TD Cowen Cuts Price Target
Slid after TD Cowen lowered its target to $240 from $300, citing concern over AI data-center spending, debt and cash flow. Investors are also watching Project…
NEW YORK — Oracle stock fell 5.2% on Tuesday after TD Cowen cut its price target to $240 from $300, even as the firm kept a Buy rating on the cloud software company. The drop marked Oracle’s biggest single-day decline since mid-July and came as investors also weighed a broader market selloff tied to renewed tensions between the U.S. and Iran.
Oracle closed at $141.32 and slipped nearly 0.8% in overnight trading. The stock opened at $140.26, while the S&P 500 ended Tuesday 0.7% lower and the Nasdaq lost 1.03% as the global bond selloff deepened and crude prices spiked.
Why analysts are turning more cautious on Oracle stock
TD Cowen said Oracle’s aggressive AI data-center expansion is raising questions about rising capex, debt, free cash flow and the company’s ability to turn its massive backlog into returns. The firm said Oracle’s analyst day on Oct. 28 is the next major catalyst for the stock and expects the event to focus heavily on the cloud business.
In its note, TD Cowen said Oracle is likely to issue updated fiscal 2030 targets at that event. The new $240 target still sits about 70% above Oracle’s last closing price, but the cut signaled that Wall Street is paying closer attention to how much the company is spending to keep up with AI demand.
That spending has become central to the story. Oracle has been building out new data centers at a fast clip to serve AI customers, and that has pushed capital expenditures sharply higher. Investors are now watching whether those investments can translate into stronger cash generation later.
One short line captures the mood: expensive growth.
Project Jupiter adds another pressure point
Oracle also faces a fresh complication in New Mexico. A court there stayed key permits for Oracle and OpenAI’s Project Jupiter, which could delay new cloud capacity and raise costs. That matters because Oracle’s AI push depends on more infrastructure coming online on time.
The company’s backlog gives it a big cushion on paper. TD Cowen pointed to Oracle’s $638 billion backlog as evidence of significant visibility into future revenue. But the same note said investors have increasingly questioned the cost of getting that backlog turned into actual profits.
The market backdrop did Oracle no favors. Tuesday’s broad risk-off move hit technology shares as global bonds sold off and crude prices jumped. Oracle’s slide stood out because it came on top of an already tense setup around AI spending and the company’s capital plan.
CNN described ORCL as trading near the bottom of its 52-week range and below its 200-day simple moving average. The stock’s market capitalization was listed at $407.07 billion, while Oracle reported total revenue of $67.36 billion over the last year and net income of $17.09 billion.
For traders, the next checkpoint is clear. Oracle’s analyst day on Oct. 28 is set to be the first real test of whether management can convince the market that the company’s AI buildout will pay off without stretching the balance sheet too far.
