Oracle Corp. (NYSE: ORCL) stock fell nearly 4% in Monday premarket trading as weakness across technology stocks weighed on sentiment. Nasdaq futures dropped 1.85%, while S&P 500 futures fell 0.77%. The stock fell as investors reassessed the outlook for artificial intelligence infrastructure spending. The Financial Times reported that investors are concerned calls to slow AI development could eventually translate into lower infrastructure and capital spending.
Those concerns intensified after Anthropic CEO Dario Amodei called for leading AI companies to work together on managing the technology's development and safety. OpenAI CEO Sam Altman and SpaceX (NASDAQ: SPCX) CEO Elon Musk supported the effort, according to the Financial Times.
Barclays strategist Emmanuel Cau said a greater focus on AI safety could raise questions about the pace of capital spending. Investors are also weighing what slower investment could mean for global growth and corporate earnings.
However, the premarket weakness comes as some investors remain bullish on Oracle's longer-term artificial intelligence opportunity.
Oracle An 'Essential' AI Stock, Kilburg Says
KKM Financial founder Jeff Kilburg called Oracle an "essential" stock to own as the software giant expands its role in AI infrastructure.
Speaking on CNBC Friday, Kilburg pointed to Oracle's latest quarterly results and growing backlog as evidence of strong demand.
"They beat on so many metrics," Kilburg said. He highlighted remaining performance obligations, or RPO, which he said increased by about $26 billion.
Oracle shares initially jumped about 7.5% to 8% following the results, Kilburg said. However, the rally faded after the stock stalled around $164 to $166.
Kilburg attributed part of the reversal to heavy options activity. Traders had bought more calls than puts ahead of the report, raising expectations for a move toward $175. When the rally stalled, short-dated options activity helped drive the shares lower, he said.
Still, Kilburg said the longer-term investment case remains intact. "We believe it's an essential name," he told CNBC.
AI Opportunity Extends Beyond OpenAI
Kilburg also pointed to Oracle's deep presence across Fortune 500 companies. Its software can be costly and difficult for customers to replace. That installed base also gives Oracle an opportunity to sell customers more AI computing capacity.
He also played down concerns about Oracle's exposure to OpenAI.
Even if OpenAI were to falter, Kilburg argued that demand for computing infrastructure would remain. Another AI company could potentially use that capacity instead.
His comments underscore the broader investment thesis around Oracle. Individual AI winners may change, but demand for the infrastructure powering AI could remain strong.
Oracle Technical Analysis
Oracle's technical picture remains mixed. The stock is about 3% below its 20-day simple moving average of $149.38. However, it remains about 3% above its 50-day SMA of $140.68.
Longer-term signals remain bearish. Oracle trades about 11.7% below its 100-day SMA of $163.93 and 13.6% below its 200-day SMA of $167.64.
The relative strength index stands at 51.53. That is a neutral reading and suggests neither buyers nor sellers have a clear momentum advantage.
Meanwhile, the 20-day SMA remains above the 50-day SMA, supporting the near-term trend. However, the 50-day SMA remains below the 200-day SMA following a January death cross.
Oracle has fallen 50.26% over the past 12 months.
Key resistance stands near $159.50, while support is around $137.
Analyst Outlook
Oracle carries a Buy consensus rating and an average price forecast of $252.65.
On Sept. 11, Stifel maintained a Buy rating but lowered its price forecast to $200. TD Cowen maintained its Buy rating and $240 forecast. UBS maintained a Buy rating and raised its forecast to $250.
Oracle Benzinga Edge Rankings
Oracle's Benzinga Edge rankings show a sharp divide between growth and market momentum. The stock scores 96.46 for Growth but just 6.8 for Momentum and 18.68 for Value.
The combination points to strong underlying growth metrics but weak stock-price momentum. A move above longer-term resistance could strengthen the technical picture. However, a break below $137 could increase downside risk.
Price Action
ORCL Stock Price Activity: Oracle shares were down 3.55% at $144.95 during premarket trading on Monday, according to Benzinga Pro data.