Retail Traders Back Oracle Over IBM Amid Earnings Season

Two big tech stocks, Oracle (ORCL) and IBM, have seen significant declines in recent months, sparking interest among retail traders. Both companies are deeply embedded in the enterprise market, but their businesses have only a certain degree of overlap today.

Oracle has been hit hard, down 63% from its peak last September and 34% year to date. Its stock fell off a cliff last month amid fresh concerns about its ability to successfully execute a debt-fueled cloud capacity expansion to meet record new orders from customers like OpenAI.

In contrast, IBM has declined 35% from its peak in June and 26% year to date. The company's recent quarterly report revealed acute weakness in its software business, with clients shifting spending to AI servers from other technology budgets faster than anticipated.

Despite the challenges facing both companies, retail traders appear to be leaning towards Oracle as their pick amongst the two. A recent Stocktwits poll showed that 53% of the 4,500 retail traders who voted believe the current ORCL price represents a buying opportunity, while 47% said IBM is a better pick.

Analysts have a mixed view on both stocks, but they see Oracle running higher. On average, they expect ORCL stock to nearly double from its current level, while they see IBM shares rising only 32%, according to analyst price targets from Koyfin.