Why Did Oracle Stock Drop Today?
Written by Rich Smith for The Motley Fool -> Broadcom sparked worries about the durability of AI growth rates earlier this week. Today, one of the biggest AI companies -- Oracle -- is taking it on the chin. One analyst still thinks Oracle is a buy, though, and could nearly dou
Broadcom sparked worries about the durability of AI growth rates earlier this week.
Today, one of the biggest AI companies -- Oracle -- is taking it on the chin.
One analyst still thinks Oracle is a buy, though, and could nearly double in a year.
Oracle (NYSE: ORCL) stock tumbled today -- along with the rest of the stock market -- falling 8.7% through 1 p.m. ET Friday, and it's no huge mystery why.
Specialty chip-maker Broadcom (NASDAQ: AVGO) reported earnings on Wednesday and, while the news was good -- beats on both sales and earnings, and a forecast for 89% sales growth in Q3 -- investors spooked once they realized Broadcom's sales forecast implied sales of its artificial intelligence chips will only triple in Q3, and not grow even faster, as analysts hoped.
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Broadcom sold off on the news yesterday , and today the panic seems to be spreading among other tech stocks.
Oracle has tied its future to the AI revolution, making a big bet on providing data center access to AI firms such as OpenAI , which could account for the bulk of Oracle's revenue in future years. It makes sense, therefore, that investors nervous about the future of AI would take out their wrath on Oracle stock today.
