Why Oracle's Prosperity May Come at the Expense of Oracle Stock
Oracle's (NYSE: ORCL) management surprised investors last week by announcing a significant increase in its capital expenditures. But what will that increased investment actually mean to investors? This planned capex bump may help the tech giant enhance gains, as it has experienced massive growth in parts of its cloud business. However, it also disrupts a profitable but slow-growth business and could bring uncertainty to the pace of Oracle's recent stock price increases.
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In past decades, Oracle was a market leader in databases and enterprise software. Though competitive threats dramatically slowed Oracle's revenue increases, the company managed to deliver steady gains for shareholders. Its stock price has risen by nearly 50% over the last 12 months and by about 145% over the previous 10 years. This occurred as Oracle embarked on a massive stock buyback program, cutting the share count from over 5 billion in 2011 to less than 2.9 billion today.
Source Fool.com
