Stock market today: S&P 500 ends lower, but tech bounce on dip-buying stems losses
Investing.com -- Oracle (NYSE: ORCL) shares fell around 3% after CoreWeave’s (NASDAQ: CRWV) third-quarter earnings disappointed investors, but Mizuho analysts believe the weakness is “largely unwarranted” and presents “a buying opportunity” for Oracle ahead of its fiscal second-quarter results in December.
In a note to clients led by Mizuho analyst Siti Panigrah, the firm said the market reaction ignored “several constructive read-throughs” for Oracle from CoreWeave’s update.
The firm maintained its Outperform rating and $400 price target on Oracle.
CoreWeave’s more than 15% stock decline follows a “soft guide tied to a temporary supply-chain delay from a third-party data center developer,” according to Mizuho, which stressed that the issue was “CRWV-specific” and unrelated to Oracle’s operations.
“Oracle reiterated at the AI World in October that its data center expansion (Abilene, TX) remains on track,” the analysts stated, adding that the company “is well-positioned to exceed expectations.”
Mizuho noted that CoreWeave’s results reinforced several bullish signals for Oracle. “AI compute demand continues to meaningfully exceed supply,” the analysts wrote, with CoreWeave reporting its backlog rose 85% year over year to $56 billion.
That, Mizuho said, supports its view that Oracle “remains well-positioned to expand its RPO base as large-scale training and inference workloads ramp.”
The note also cited “durability in H100 pricing” as CoreWeave’s first major GPU contract was recontracted “at a price within roughly 5% of the original agreement,” suggesting pricing “remains resilient.”
Overall, Mizuho believes Oracle’s fundamentals remain strong, citing “flexible financing options” and a disciplined data center buildout.
“We view current weakness as a buying opportunity ahead of its FQ2 print,” the analysts concluded.