Here's why Citi lowered Oracle's price target to $370

Core Viewpoint - The company is experiencing strong booking growth, with the second strongest booking quarter ever, but near-term revenue numbers have not increased significantly. However, next year's revenue has been raised by $4 billion [2][4]. Financial Performance - The company has ambitious targets for 2030, aiming for over $20 in earnings, but there are uncertainties regarding near-term revisions in the financial model [3][6]. - The backlog has grown significantly, reaching $4.523 billion, with a notable acceleration in revenue expected to be recognized over the next 12 months, which increased by over 40% this quarter [17][18]. Capital Expenditure and Financing - The company is facing a capital-intensive environment, with expectations of revenue growth 3 to 4 times from current levels, necessitating front-loaded investments [7][9]. - There is an anticipated need to raise approximately $60 billion in debt over the next 3 to 4 years, with potential for various financing options including convertible offerings [13][14]. Market Sentiment and Future Outlook - The market is currently focused on financing uncertainties and the implications of OpenAI's commitments, which could impact investor confidence [5][12]. - The company is expected to maintain its investment-grade rating, with alternative financing solutions available to mitigate risks associated with potential downgrades [12][16]. - Clarity on financing and positive movement in numbers are crucial for improving market sentiment and stock performance over the next 6 to 12 months [15][18].