In a surprise move, top-rated J.P. Morgan analyst Mark Murphy has downgraded tech company Oracle (NYSE: ORCL) from a Buy to a Hold, citing potential hurdles in the company’s growth trajectory. The analyst pointed out that despite a resilient recurring revenue stream and the potential for relative outperformance in a post-pandemic environment, Oracle faces challenges.
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Elaborating further, Murphy stated that the transition of Cerner and data center buildout concerns may impact Oracle Cloud’s Infrastructure growth. The analyst acknowledged Oracle’s accomplishments, including solid cloud infrastructure growth, an expanding AI business, and margin expansion. However, Murphy remained concerned about the company’s revenue growth falling below expectations, data center buildout delays, and uncertainties in the Cerner business.
As a result, the analyst lowered the price target on the stock to $100 from $112.
Analysts remain cautiously optimistic about ORCL stock with a Moderate Buy consensus rating based on seven Buys and 10 Holds.