Oracle receives renewed reassurance from Mizuho as the company continues to outperform despite share price declines

This article first appeared on GuruFocus.

oracle (ORCL, Finance) received a new vote of confidence from Mizuhowhich reiterated its Outperform rating and $400 price target ahead of its fiscal second-quarter results release on December 10. The company said the recent selloff had more to do with investor concerns about capital spending than a shift in Oracle’s long-term trajectory.

Oracle shares have fallen sharply since peaking in September, but have regained some momentum with a gain of 8% last week. Mizuho expressed concerns about high data center investments and financing needs, citing the company’s low current ratio and negative free cash flow last year. The company expects Oracle to rely more on supplier financing and finance leasing to control costs – an approach that is becoming increasingly common in the AI ​​infrastructure sector.

Wall Street expects fiscal 2026 earnings per share of $6.98 on revenue growth of 17%, and Mizuho expects the company to post solid earnings…