Oracle stock falls below support as bond yields spike
Oracle shares slipped below $134.95 support to $131.50 as yields on its 2034 bonds rose to 6.518% from a year-to-date low of 5.34%.
On Friday Oracle Corp. shares fell through a technical support level, reaching $131.50 after trading below $134.95. The stock is down more than 62% from its Sept. 10 all-time high of $346.23. Yields on the company’s 2034 bonds climbed to 6.518% from a year-to-date low of 5.34%.
The company reported fiscal fourth-quarter revenue of $19.2 billion, up 21% year over year. Cloud infrastructure revenue rose 93% to $5.8 billion, and cloud applications revenue increased 10% to $4.1 billion. For the full year, revenue was $67 billion, up 17%, and operating cash flow was $32 billion, up 54%.
Remaining performance obligations, Oracle’s backlog measure, increased by $85 billion in the quarter to $638 billion. Approximately $300 billion of that backlog is tied to a contract with OpenAI that is scheduled to begin in 2027.
Capital spending increased sharply last fiscal year. Oracle’s capital expenditures rose 162%, and reported free cash flow was about negative $24 billion. Reported debt was near $130 billion at year end. Management planned roughly $40 billion in capital raises and completed about $43 billion in debt issuance and $5 billion in equity sales.
Fixed-income trading showed other yield moves: 2038 maturities were yielding about 6.70% and 2027 issues around 4.56%. Higher yields raise the company’s future borrowing costs.
On technical charts, the stock has moved below several common moving averages and other indicators after the slide from last year’s peak. Some analysts continue to maintain positive ratings: KeyBanc has an overweight rating, Wedbush set a $240 target, Bernstein a $325 target and Wolfe Research $225. The average analyst target compiled by market data is about $268.
Market forecasts referenced by analysts expect first-quarter revenue of roughly $19.12 billion, a 28% year-over-year increase, and project annual revenue near $90 billion this year and about $130 billion next year.
The decline in Oracle’s share price reduced the founder’s reported net worth by about $60 billion this year, to approximately $187 billion.
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