Shares of Oracle moved lower on Thursday as broader US markets declined and investors focused on the company’s upcoming fiscal third-quarter results.
At the time of writing, Oracle stock was down around 2% at $148.60.
The enterprise software company is scheduled to report results for the third quarter of fiscal 2026 on March 10.
Oracle shares have fallen roughly 23% so far this year as investors assess the impact of the company’s heavy spending on artificial intelligence infrastructure, rising debt levels, and its close ties with partners such as OpenAI.
Barclays sees AI growth but margin pressure
Analysts at Barclays lowered their price target on Oracle to $230 from $310 in a note published Monday.
The firm warned that accelerating AI-related growth could also create short-term pressure on margins.
Barclays analyst Raimo Lenschow told investors that Oracle’s fiscal third-quarter results should reflect “a meaningful AI-driven revenue acceleration.”
However, he cautioned that the ramp-up in AI infrastructure could also weigh on profitability.
According to Lenschow, the same growth momentum “will likely also pressure margins from upfront costs/timing.”
He added that AI-related revenue may come in slightly above consensus estimates as more computing capacity came online during the quarter.
Foreign-exchange trends were also described as “more favourable than guided.”
Even so, the analyst warned that gross margins and earnings per share could face headwinds as “upfront investments and lease expense timing for the additional huge capacity ramps in H2 CY26 will create negative timing effects.”
Barclays said this dynamic could divide investors.
“Bulls (including us) will focus on the ongoing growing momentum for the company, while bears have at least the margins to pick on,” the firm wrote, adding that the third quarter “will not be a conclusive quarter either way.”
Scotiabank maintains positive outlook
Meanwhile, Scotiabank lowered its price target on Oracle to $215 from $220 but maintained a Sector Outperform rating ahead of the earnings release.
Analyst Pat Colville said expectations for the company have moderated and that Oracle’s shares are now trading roughly in line with their five-year average next-twelve-month price-to-earnings multiple.
Scotiabank said Oracle’s increased capital expenditures should translate directly into monetisation opportunities and help support its fiscal 2026 targets for Oracle Cloud Infrastructure.
The firm also said Oracle’s recent capital raising efforts should help ease concerns about funding requirements in calendar year 2026.
Additionally, OpenAI’s $110 billion capital raise suggests the company will be able to meet its commitments through fiscal 2026 and 2027.
Abilene AI data centre plans reaffirmed
Oracle also addressed recent reports regarding its flagship AI data centre project in Abilene, Texas.
Earlier this month, Bloomberg reported that Oracle and OpenAI had abandoned plans to expand the facility, citing extended financing negotiations and shifting needs from OpenAI.
The report also said Meta Platforms was considering leasing the planned expansion site from developer Crusoe, with Nvidia facilitating discussions and providing a $150 million deposit.
Oracle rejected those reports, stating that construction of the Abilene campus remains on track.
“Crusoe and Oracle are operating in lockstep to deliver one of the world’s largest AI Data centers in Abilene at record-breaking pace,” the company said.
“Two buildings are completely operational, and the rest of the campus is on track.”
A spokesperson for Crusoe echoed that message, saying the companies are working together to deliver one of the world’s largest AI infrastructure facilities and that the collaboration is enabling them to build massive-scale infrastructure at an accelerated pace.
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