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Spooked Investors Overreacted, Oracle Was Oversold: Fast Pros

“I don’t think there’s any reason to be alarmed,” says top ranked UBS analyst Brent Thill after sifting through the latest Oracle earnings report, which was arguably the worst in recent memory.

However, he goes on to admit he finds the results concerning. “Yes I’m shaken,” he reveals. "We haven’t seen a miss this broad based in a long time – not from Oracle. Not everything across the board.”

It appears other investors share his concern. Shares of Oracle slid as much as 10% in extended trade after the company reported earnings that missed on both quarterly revenue and earnings.

Immediately investors wanted to know if the results were due to problems at Oracle or if they were due to a broad economic slowdown.

“I think it’s industry-wide. I don’t think the weakness is Oracle specific,” says Thill. "They indicated on the call they needed additional approvals. I think that's a sign that companies are putting the brakes on spend. That's probably an indicator that we'll see across the board in the software space."

"But I don't think this is a sign that Oracle is losing share to others in the industry," he adds.

How should you trade it?

Guy Adami thinks it may be time to hit the buy button.

“Shares are down 19% since the May high and now they're down another 10% in the after market. On Wednesday, if we see a flush in Oracle on big volume, I’m talking north of 65 million shares I’d look at buying,” says Guy Adami.

In other words, he thinks investors overreacted to the news and the stock is now oversold.

Trader Mike Murphy agrees. “Buying a company like Oracle on a pull back like this, that's an opportunity,” he says.

Tim Seymour is also bullish. "If it trades down to $24.50 – I think you can play this thing,” he says.

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Looking at the numbers a little more closely - the world's No. 3 software maker reported profit, excluding items, of 54 cents per share in its second quarter ended Nov. 30, missing the average analyst forecast of 57 cents, according to Thomson Reuters I/B/E/S.

New software sales rose 2 percent from a year earlier to $2 billion during the quarter. Analysts, on average, were expecting new software sales of $2.2 billion, according to StreetAccount.

The company also reported that hardware product sales fell 14 percent to $953 million, below the average Street account forecast of $1.06 billion.


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Trader disclosure: On Dec. 20, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Seymour is long BAC; Seymour is long INTC; Seymour is long CSCO; Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Terranova is long VRTS; Terranova is long IBM; Terranova is long LQD; Terranova is long MUB; Terranova is long EMC; Terranova is long CSCO; Terranova is long AXP; Terranova is long SBUX; Terranova is long TRLG; Finerman owns AAPL; Finerman owns BAC; Finerman owns JPM; Finerman owns IBM; Finerman owns CVS; Finerman owns DIS; Murphy owns AKS; Murphy owns BAC;

Mike Khouw
Cantor Fitzgerald is a market maker in securities of AAPL
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Brent Thill
The U.S. equity strategist, a member of his team, or one of their household members has a long common stock position in Oracle Corporation.

Stephen Schork
No disclosures

Mike McCormack
(T) Nomura Securities International Inc. makes a market in securities of the company

(CVC) Nomura Securities International Inc. makes a market in securities of the company.

(CTL) Nomura Securities International Inc. makes a market in securities of the company.

(CMCSA) Nomura Securities International Inc. makes a market in securities of the company.

(DTV) Nomura Securities International Inc. makes a market in securities of the company.

(DISH) Nomura Securities International Inc. makes a market in securities of the company.

(FTR) Nomura Securities International Inc. makes a market in securities of the company.

(S) Nomura Securities International Inc. makes a market in securities of the company.

(TWC) Nomura Securities International Inc. makes a market in securities of the company.

(VZ) Nomura Securities International Inc. makes a market in securities of the company.

(WIN) Nomura Securities International Inc. makes a market in securities of the company.

Brian Kelly
Shelter Harbor Capital is long KRE
Shelter Harbor Capital is long IWM

CNBC.com with wires.