Oracle stock continued its strong freefall this week, reaching its lowest level since April last year. ORCL has slumped by over 62% from its all-time high, with Larry Ellison’s net worth plunging by $60 billion this year to $187 billion. It has become one of the top laggards in the AI space.

Oracle stock has plunged despite strong revenue and backlog growth

ORCL stock has been in a steep decline despite being one of the top beneficiaries of the artificial intelligence boom. Its most recent financial results showed that its revenue and backlog continued rising.

Its revenue jumped by 21% to $19.2 billion in the fiscal fourth quarter, with its cloud infrastructure figure rising by 93% to $5.8 billion. Its cloud apps revenue jumped by 10% to $4.1 billion.

For the year, its revenue jumped by 17% to $67 billion, with its operating cash flow rising by 54% to $32 billion.

Most importantly, the company’s RPO or backlog, jumped by $85 billion in Q4 to $638 billion, with its top clients including companies like Applied Intuition, SoundHound (SOUN), Admiral, and Kobalt. 

Wall Street analysts are bullish on the company, with the revenue estimate for the first fiscal quarter being $19.12 billion, up by 28% YoY. Its annual revenue is expected to jump 32% this year to $90 billion, followed by $130 billion next year.

Soaring debt and OpenAI deal are key risks

Despite this growth, analysts are still concerned about Oracle’s huge debt load and its overreliance on OpenAI. Of its huge RPO, $300 billion of it comes from OpenAI, a company whose growth has started slowing amid rising competition from Anthropic. The contract will start in 2027, with OpenAI buying massive amounts of AI compute.

Most importantly, there are concerns about its massive debt load and soaring capital expenditure. Its capex jumped by 162% in the last fiscal year, with its free cash flow coming in at negative $24 billion.

The company’s debt has also jumped, and this trend will continue. It ended the last year with $130 billion in debt, with the company planning to raise $40 billion through debt and equity. It raised $43 billion in debt sales and $5 billion in equity.

Investors are concerned about its soaring debt, which has pushed its yields higher. TradingView data shows that the yield of its 2034 bonds jumped to 6.518% from the year-to-date low of 5.34%. Its 2038 bonds are yielding 6.70%, while its 2027 ones are yielding 4.56%.

Still, on the positive side, the ongoing Oracle stock crash has made it a bargain, with most analysts having a favorable rating. Keycorp recently reiterated its overweight rating, while Wedbush’s Dan Ives placed a target of $240.

Bernstein has a target of $325, while Wolfe Research placed a target of $225. MarketBeat data shows that the average target for the stock is $268. 

ORCL stock technical analysis

Oracle stock chart | Source: TradingView

The daily chart shows that the ORCL stock has slumped in the past few months, moving from a high of $346.23 on September 10 last year to the current $131.5.

It recently crossed the crucial support level of $134.95, its lowest level in February and April this year.

The stock has dropped below all moving averages and the oversold level of the Murrey Math Lines tool. It also remains below the Supertrend indicator.

Therefore, the waning sentiment will likely push it lower, potentially to $120 or even $100. However, in the long term, the stock will bounce back as investors rotate from semiconductor names to hyperscalers.

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US consumer prices recorded their biggest monthly decline in more than six years in June as a sharp drop in energy prices provided temporary relief from this year’s inflation pressures.

The Consumer Price Index for All Urban Consumers (CPI-U) fell 0.4% on a seasonally adjusted basis in June after rising 0.5% in May, the Bureau of Labor Statistics (BLS) said on Tuesday.

Economists had forecast a monthly decline of 0.2%.

The decline was the largest one-month drop since April 2020, when prices fell 0.8% during the early stages of the pandemic.

On an annual basis, consumer prices increased 3.5%, down from economists’ expectations of 3.8%, according to a Dow Jones survey.

Despite the softer-than-expected reading, the report is unlikely to provide lasting relief for households or eliminate the possibility of another Federal Reserve interest rate increase later this year as tensions in the Middle East resurface and oil prices rise again.

However, the S&P futures rose on the news by 0.2%. Nasdaq 100 futures rose by 1%.

Gasoline prices provide temporary relief

The decline in headline inflation was driven largely by lower fuel costs after gasoline prices retreated from multi-year highs following a fragile ceasefire between the United States and Iran last month.

The energy index fell 5.7% in June after rising 3.9% in May, 3.8% in April, and 10.9% in March.

According to the BLS, the drop in energy prices was the single largest contributor to the decline in overall consumer prices, more than offsetting increases in food and shelter costs.

However, energy prices remain significantly higher than a year ago, with the index still up 15.7% over the past 12 months.

Food prices continued to edge higher, with the food index rising 0.2% during June, matching the increase recorded in May.

Grocery prices also climbed 0.2% over the month, while food inflation stood at 3% on an annual basis.

Core inflation remains subdued

Core inflation, which excludes the more volatile food and energy categories, was unchanged in June, bringing the annual core inflation rate to 2.6%.

Economists had expected core prices to rise 0.2% during the month and 2.9% from a year earlier.

The softer core reading suggests underlying price pressures eased during the quarter, although the outlook remains uncertain.

Middle East conflict clouds outlook

The improvement in inflation may prove short-lived.

The ceasefire between the US and Iran collapsed last week after commercial vessels came under attack in the Strait of Hormuz, triggering renewed military strikes between the two countries.

Fuel prices have already begun moving higher again.

According to motorist advocacy group AAA, the national average gasoline price rose to $3.86 a gallon on Tuesday from $3.79 a week earlier.

Oil prices also climbed to a four-week high after President Donald Trump announced that the United States would reinstate a naval blockade around Iran, targeting the Strait of Hormuz, one of the world’s most critical oil shipping routes.

Further increases in energy prices could quickly feed back into consumer inflation over the coming months.

The Federal Reserve left its benchmark interest rate unchanged at 3.50%-3.75% during its June meeting, although updated projections showed policymakers increasingly leaning toward another rate increase in 2026.

Before Tuesday’s inflation report, futures markets tracked by CME FedWatch indicated investors were assigning roughly a 51.9% probability that the Fed would raise interest rates at its September 15-16 policy meeting.

The latest inflation data may temper those expectations somewhat, but renewed pressure on oil prices could keep policymakers cautious.

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The New York Times’ stock has pulled back into a local correction, retreating from its year-to-date high of $87.18 to $75. The decline follows profit-taking after Berkshire Hathaway disclosed its stake in the company back in February. Even so, the underlying business remains strong, and that strength points to a likely rebound heading into earnings.

New York Times is not failing

President Donald Trump has always claimed that the New York Times business was failing. However, in reality, its business is booming, helped by its digital business, and its large market share in the media industry.

Unlike the Washington Post and LA Times, its business continues growing, with visitors on its website continuing to rise. Its total visits rose by 1% to 605 million in June, while The Washington Post and LA Times had 64 million and 25 million in the same period.

The most recent results showed that its business did well in the first quarter. Its digital-only subscription jumped by 16.1%, near the upper side of its range. Total subscription revenue rose by 11.3%, also higher than the guided range of between 9% and 11%.

NYT’s digital advertising revenue rose by 31%, while its advertising and affiliate, licensing and other revenues rose by 17% and 7.8%, respectively. These numbers are strong for a media company that has been in business in the last 175 years. 

Wall Street analysts suggest that its growth will continue, seeing modest growth, helped by Donald Trump’s news, upcoming midterm elections, and the resuming US-Iran war. 

The paper will also do well after the upcoming election, especially if Democrats win the House of Representatives and the Senate. They will intensify their investigations against Trump, including a potential impeachment. Polymarket data shows that there is a 66% chance that he will be impeached before his term ends.

NYT’s market share in the US and the potential revenue growth explains why it continues trading at a premium. Data shows that it has a forward price-to-earnings ratio of 28, higher than the communication sector average of 15. Its forward PEG ratio of 1.58 is also higher than the expected 1.23.

Analysts see some modest growth in the near term. UBS and Bank of America have a target of $80, while JPMorgan has a target of $82. The most optimistic analyst is Deutsche Bank, which noted that the stock may jump to $95. 

NYT stock price technical analysis

New York Times stock chart | Source: TradingView

The daily chart shows that the NYT stock has pulled back in the past few months, moving from the year-to-date high of $87 in April to $75 today. On the positive side, the stock has found support at the 200-day moving average.

The stock has slowly formed a bullish flag pattern, a common continuation sign in technical analysis. It is attempting to flip the red Supertrend indicator from red to green.

Therefore, the most likely scenario is where the stock continues rising as bulls target the year-to-date high of $87. Such a move would signal a 16% increase from the current level. The other potential target is $84, the 38.2% Fibonacci extension level. 

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US stocks opened higher on Tuesday after softer-than-expected June inflation data reduced expectations of an immediate Federal Reserve rate hike. 

Investors also assessed second-quarter earnings from major US banks and corporate results, while keeping an eye on rising oil prices following renewed tensions in the Middle East.

The S&P 500 rose about 0.12%, while the Nasdaq Composite gained around 0.44%. 

The Dow Jones Industrial Average slipped roughly 0.29%, pressured by IBM.

The Labor Department reported that the consumer price index (CPI) rose 3.5% year over year in June, below economists’ expectations of 3.8%. 

On a monthly basis, CPI fell 0.4%, compared with forecasts for a smaller decline.

Following the report, traders significantly lowered expectations for a near-term interest rate increase. 

Market pricing showed the probability of a rate hike at the Federal Reserve’s upcoming meeting falling sharply, although expectations for a September increase remained elevated.

Investors are also awaiting Federal Reserve Chair Kevin Warsh’s semiannual monetary policy testimony before Congress later in the day for further clues on the central bank’s policy outlook.

IBM sinks as earnings season begins

Corporate earnings remained a key focus as Wall Street’s second-quarter reporting season gathered pace.

IBM shares plunged more than 25% in trading after the technology company forecast preliminary second-quarter revenue below analysts’ expectations and warned that profits would fall short because of weaker demand across its software and infrastructure businesses.

The weakness spilled over to other software companies. 

Oracle declined 0.79%, while ServiceNow and Accenture each fell more than 5% in trading.

Meanwhile, major US banks were trading up after reporting better-than-expected quarterly profits.

Goldman Sachs rose 4.2% after stronger dealmaking activity and increased market volatility helped drive record performance in its equities trading business.

Shares of JPMorgan Chase, Citigroup, Bank of America and Wells Fargo all traded higher after posting second-quarter earnings that exceeded analyst expectations.

Investors are closely watching earnings reports for signs of corporate resilience after the S&P 500’s strong rally this year, with analysts expecting second-quarter earnings growth of nearly 24% for the index.

Chip stocks rebound as oil prices remain elevated

Semiconductor stocks recovered after Monday’s sharp sell-off, helping lift the technology-heavy Nasdaq index.

The iShares Semiconductor ETF climbed about 3.6% in trading. 

The VanEck Semiconductor ETF also advanced more than 2.7%.

Among individual chipmakers, Applied Materials gained more than 4.11%, while Teradyne rose about 5.8%. 

Lam Research and Micron Technology each climbed more than 4%, and STMicroelectronics added over 2.9%.

Despite the rebound in technology shares, gains across the broader market remained limited as oil prices stayed elevated.

US crude traded above $80 a barrel, while Brent crude rose more than 4% to above $86 a barrel after President Donald Trump announced plans to reinstate a blockade on Iranian shipping through the Strait of Hormuz. 

The announcement followed renewed military exchanges between the United States and Iran and renewed concerns about global energy supplies.

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West Texas Intermediate (WTI) and Brent crude oil benchmarks rose slightly on Hyperliquid as tensions between the US and Iran escalated. WTI rose to $73, with its 24-hour volume and open interest rising to $113 million and $222 million, respectively. Brent rose to $78, with a trading volume of $63 million. 

Iran closes Strait of Hormuz, triggering US strikes

WTI and Brent benchmarks rose slightly as tensions between the US and Iran escalated. In a statement on Saturday, Iranian officials said that they had closed the Strait of Hormuz, blaming the US for violating the ceasefire agreement. In a statement in Turkey, Trump said that the ceasefire was “over.”

The US military, through CENTCOM, said that it had launched more strikes against Iranian targets overnight, with Iranian officials vowing to respond. In the last attacks, Iran launched retaliatory attacks on US military sites in Kuwait and Bahrain.

Recent data shows that traffic through the Strait of Hormuz has faded in the past few days. Tankers are afraid of being attacked, which would lead to losses worth millions of dollars. Also, insurers are afraid of offering services to ships crossing the Strait.

These developments are happening a day after Trump warned Iran against assassinating him. In a Truth Social post, Trump said that Iran would be destroyed if it did that. This statement came after the US received intelligence that Iran was considering ways to assassinate him. 

In a statement on Saturday, Iran’s Mojtaba Khamenei said that Iran would retaliate against the killing of his father and other Iranians, including the school girls in Minab. 

Therefore, there is a risk that the kinetic activity between the US and Iran will resume, affecting oil supplies at a time when inventories are still falling.

Russia and Ukraine war

Meanwhile, crude oil prices are reacting to the ongoing developments in Russia, where Ukraine has continued to attack oil and gas infrastructure in the country. It has already attacked some of the biggest Russian refineries, leading to shortages across the country. Ukraine has also attacked Russian oil tankers at sea.

Therefore, there is a risk that Russian oil supplies to the global market will be disrupted in the near future. All these events mean that the oil glut that some analysts were expecting will be delayed. 

Brent crude oil price technical analysis

Brent crude oil prices chart | Source: TradingView

The daily chart shows that Brent crude oil price bottomed at $70.20 earlier this month as investors reflected on the situation between the US and Iran. It then bounced back to $79.5 as the two sides restarted their strikes, and then pulled back to $75.22. 

Brent then rose to $78 on Hyperliquid on Sunday as the two sides launched strikes. It is attempting to rise above the key resistance level of $79.5, which it reached last week.

It remains slightly below the 61.8% Fibonacci Retracement level and the 50-day Exponential Moving Average (EMA). Also, the Supertrend indicator is still red, a sign that bears remain in control.

Therefore, the price will likely be highly volatile depending on how the Iranian situation evolves. An escalation, which is happening, may push oil prices to $80 and above in the near term.

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