Oracle Cloud Earnings Dissapoint Sending $ORCL Lower


Wedbush maintained $ORCL Outperform rating and 12-month price target of $58.

As we’ve been saying, meaningful acceleration in PaaS/IaaS will probably take several quarters, as ORCL works to gain traction with revamped packaging, pricing, and technology (autonomous database). We’re a little concerned that management’s commentary could create unrealistic expectations among investors about the pace of adoption of autonomous database, as customers generally take many quarters (or even years) to evaluate major new ORCL database technology innovations, even when value-add is significant. However, we’re optimistic that database ELA activity will remain solid, as ORCL benefits from a robust demand environment, a strong competitive position, and greater clarity on their pathway to cloud with their Oracle licenses.