"Too good" turns into bad news? Oracle Corporation (ORCL.US) stock price plunges by approximately 6.9% after issuing very optimistic guidance, marking its worst single-day performance since January.

Benefiting from the artificial intelligence infrastructure boom, Oracle Corporation (ORCL.US) saw its stock price plummet by about 6.9% on Friday after a continuous rise, marking its worst single-day performance since January. The day before, the company announced very optimistic long-term growth guidance for the fiscal year 2030 at the "Oracle AI World" analyst conference in Las Vegas, which initially pushed the stock price up by 3.1%. However, as the market began to digest the details and there were disagreements on its achievability, there was a concentrated selling pressure. Oracle Corporation stated that it expects cloud infrastructure revenue for the fiscal year 2030 to soar from $18 billion in fiscal year 2026 to $166 billion, with total revenue reaching $225 billion, corresponding to a compound annual growth rate of over 31%, and an adjusted earnings per share (EPS) target of $21. These figures reflect the management's high confidence in AI-driven business expansion and were the core logic behind the stock's previous strong performance. However, some analysts warned investors to take time to assess whether this growth rate is realistic. RBC Capital Markets analyst Rishi Jaluria said the stock price could enter a "digestion phase" in the short term, waiting for the market to reassess the credibility of these long-term numbers. Meanwhile, UBS analyst Karl Keirstead raised his target price to $380, believing that the current stock price still does not fully reflect the potential earnings from the AI business. But he also cautioned that the market may be concerned about Oracle Corporation's business being highly dependent on OpenAI and the bottlenecks and execution risks brought about by extreme expansion. Oracle Corporation has been a significant beneficiary of this AI infrastructure cycle, recently announcing a multi-billion dollar, five-year partnership with OpenAI to provide AI chip infrastructure. Additionally, Oracle Corporation confirmed a cloud services partnership with Meta (META.US) and said it has already secured $65 billion in cloud infrastructure commitments this quarter. The company's management emphasized that its AI orders are highly diversified and not solely dependent on a single customer. Oracle Corporation's new co-CEO, Clay Magouyrk, stated that this quarter's new commitments came from seven contracts from four customers, "none of which came from OpenAI." He said that the market's questioning is "too linear," and the company's customer base in AI cloud services is rapidly expanding.