Oracle stock fell sharply after its fiscal fourth-quarter earnings release showed negative free cash flow and the company guided for a 25% increase in capital expenditures to $70 billion for the next fiscal year, alongside a planned $20 billion equity raise. The stock closed at $184.29 on June 18, down from $201.26 before the June 10 report and well off a recent peak of $248.15 on June 1. One strategy highlighted for investors is selling short out-of-the-money put options, such as the $165 strike expiring July 24, which offers a $4.25 midpoint premium for an immediate yield of 2.576% and a breakeven of $160.75, 12.77% below the recent close. Analysts remain bullish with average price targets ranging from $252.64 to $286.30, suggesting the elevated put premiums reflect excessive pessimism.
Oracle CorporationOracle guided for a 25% increase in capex to $70B and a $20B equity raise, causing negative free cash flow and a sharp stock decline.