How Will Wall Street React to Google’s (NASDAQ:GOOG) Dumping of Oracle Corporation’s (ORCL) Java on Android?


Today should be an interesting day on Wall Street for Oracle Corporation (NYSE:ORCL), as it was reported late yesterday that Google (NASDAQ:GOOG) will end their long-standing conflict with the company and remove Java APIs from the next version of Android.

After the news broke yesterday, shares of Oracle Corporation (NYSE:ORCL) didn’t show any noticeable response. It should be interesting to see if now that more media outlets have covered this, if we will see either a jump or decline in share price in trading today. Google (NASDAQ:GOOG), as many of you know, has been using Oracle’s Java code since the launch of Android, and this has caused many conflicts between the two companies. Google’s answer to Oracle now simply will be to change directions and use an open-source alternative called OpenJDK.

This could have a negative impact on Oracle’s Java code as more developers will now be turning to OpenJDK for development of mobile applications.

The stock closed at $37.04 during the last trading session. It is down 16.09% since May 27, 2015 and is downtrending. It has underperformed the S&P500 by 13.82%.

From a total of 15 analysts covering Oracle (NYSE:ORCL) stock, 10 rate it a “Buy”, 0 a “Sell”, and 5 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $50 while the lowest target price is $41. The mean of all analyst targets is $44.91 which is 21.25% above today’s ($37.04) stock price. Oracle was the topic of 17 analyst reports since July 30, 2015 according to the firm StockzIntelligence Inc. UBS maintained shares on December 17 with a “Buy” rating. BTIG Research initiated shares with a”Buy” rating and a $44 target share price in their report from a September 10. RBC Capital Markets maintained ORCL stock in a recent report from December 17 with a “Outperform” rating. Finally, Morgan Stanley downgraded the stock to a “Equal-Weight” rating in a report they issued on a November 11.

The institutional sentiment decreased to 0.72 in Q2 2015. It’s down 0.15, from 0.87 in 2015Q2. The ratio dropped, as 130 funds sold all their Oracle Corporation shares they owned while 622 reduced their positions. 67 funds bought stakes while 471 increased their total positions. Institutions now own 2.29 billion shares which is 9.81% less than the previous share count of 2.54 billion in 2015Q2.

Black Creek Investment Management Inc. holds 12.2% of its total portfolio in Oracle Corporation, equating to 2.57 million shares. Caledonia Investments Plc owns 862,500 shares representing 11.21% of their total US portfolio. Moreover, Mountain Lake Investment Management Llc has 9.09% of their total portfolio invested in the company, equating to 312,500 shares. The Alabama-based Vulcan Value Partners Llc has a total of 8.17% of their portfolio invested in the stock. Veritas Investment Management Llp, a United Kingdom-based fund reported 983,915 shares owned.

Oracle Corporation is a provider of enterprise software and computer hardware products, and services. The company has a market cap of $154.56 billion. The Company’s offerings include Oracle database and middleware software, application software, cloud infrastructure, hardware systems including computer server, storage and networking products, and related services. It has 17.83 P/E ratio.