Oracle ( ORCL ) shares are under pressure after reporting third quarter results that missed expectations .
RBC Capital Markets managing director of software Rishi Jaluria joins Madison Mills on Morning Brief to take a closer look at the earnings print and the subsequent stock move.
"It was overall a pretty mixed quarter ," Jaluria says, highlighting that the company missed its own guidance for the third quarter despite its strong backlog growth.
The analyst, who cut his price target for Oracle stock to $145 from $165, tells Yahoo Finance, "My concern is the sustainability of some of this growth that they've signaled," given that they're "also seeing capacity constraints; they're taking longer to get data centers online than expected."
Jaluria notes that Oracle's growth may be "temporary or nonsustainable" as cloud provider competitors, like Amazon ( AMZN ) and Microsoft ( MSFT ), as well as artificial intelligence (AI) players, build more data center capacity and no longer need to rely on Oracle.
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This post was written by Naomi Buchanan.