Analysts were left confused on where Oracle shares could go from here after the database software giant delivered its fiscal second-quarter report . Shares of Oracle plummeted 11% after the company reported revenue of $16.06 billion, less than the $16.21 billion analysts polled by LSEG had expected. Software revenue in the quarter fell 3% and came in at $5.88 billion. This also missed the $6.06 consensus estimate. On top of that, the company’s free cash flow for the November quarter was negative by about $10 billion, while the StreetAccount consensus was negative $5.2 billion. Oracle’s mixed results threw analysts for a loop, with many pointing out that uncertainty and overhang could linger as investors wonder how Oracle will hit its ambitious forecasts. Morgan Stanley said its price target and other estimates were “under review.” Many other analysts cut their price targets, citing a potentially long overhang on the stock. “The stock saw a significant negative reaction after hours, which in our view signals investors may be increasingly losing confidence in Oracle’s ability to convert this large (and still expanding) backlog into durable, profitable, revenue streams,” wrote Morgan Stanley analyst Keith Weiss. “Bottom line, investors need greater confidence that the emerging GPUaaS business will be accretive to earnings and free cash flow, and that the counterparties underpinning Oracle’s robust backlog will prove durable, before underwriting out-year targets.” Bernstein’s Mark Moerdler echoed the sentiment that Oracle’s last quarter was overall a decent one, but was muddled by complex controversies. He said that investors would “need more details” before fully embracing Oracle’s long-term thesis, which he believes is ultimately positive. “Investors are looking for numbers to ‘hang their hat on’ and since the closest answer was the statement that cash required will be
