Shares of Oracle Corp. (ORCL) experienced a significant decline of 12.1% in midday trading. This marks the largest one-day selloff the company has witnessed in the past 21 years. The disappointing earnings report shook investor confidence, resulting in a negative impact on exchange-traded funds (ETFs) that have substantial holdings in Oracle’s stock.
Cloud Computing ETFs Affected
The Fidelity Cloud Computing ETF (FCLD), which heavily relies on Oracle as its primary component with a 4.5% weighting, saw a decline of 1.9%. Out of the 50 equity components within the FCLD, 38 experienced losses. Additionally, the iShares Expanded Tech-Software Sector ETF (IGV), which holds an 8.1% weighting in Oracle, dropped by 2.2%, with 88 of its 117 equity components losing ground.
Direxion Daily Cloud Computing Bull 2X ETF Takes a Hit
The Direxion Daily Cloud Computing Bull 2X ETF (CLDL) also suffered a setback due to Oracle’s disappointing performance. With Oracle accounting for 4.3% of its portfolio, the CLDL experienced a significant drop of 3.5%, with 44 out of its 52 components trading lower. Oracle’s stock held the third-heaviest weighting in both the IGV and the CLDL ETFs.
Broad Market Impact
The SPDR S&P 500 ETF (SPY), tracking the S&P 500, saw a decline of 0.3%, with less than half of its components (46%) trading lower. Within the SPY, Oracle is the 35th most heavily weighted component, representing a weight of 0.52%.
It’s evident that Oracle’s underwhelming financial results have had a substantial impact not only on its own stock but also on various ETFs with significant holdings in the company. Investors are closely monitoring the developments and awaiting Oracle’s strategy to bounce back from this setback.