OVHcloud Stock: 19.12% Drop at Midday Amid Disappointing Guidance
The stock of the European cloud computing specialist has significantly declined this Tuesday morning, erasing a significant part of its annual gains and amplifying a negative trend that has already been underway for several weeks.
Significant Drop in OVHcloud Stock Price
OVHcloud's stock is listed at 9.05 euros at midday, down 19.12% compared to the previous day's closing price of 11.19 euros. This sharp correction adds to a challenging period for the stock, which now accumulates a loss of 21.65% over the last seven days and 18.1% over three months. However, its performance over the past year remains positive at 26.48%, significantly outperforming the CAC 40, which has progressed by 7.92% over the same period. Trading volumes significantly increased this morning, representing 0.39% of the capital, a level much higher than usual sessions, reflecting a marked reaction from investors. Meanwhile, the Paris index slightly increased by 0.12%, highlighting the contrast with the trajectory of the stock. The publication of the annual results for fiscal year 2025 and the simultaneous announcement of growth targets for the following year triggered this wave of sales. Although the company crossed the symbolic threshold of one billion euros in revenue with an organic growth of 9.3%, in line with expectations, and reported an adjusted EBITDA margin of 40.4% and a net result back in the positive, the forecasts for the 2025-2026 fiscal year cooled expectations. OVHcloud expects organic growth between 5 and 7%, well below the market consensus of 9.6% according to TP Icap Midcap. This expected slowdown in growth comes in a context where the segment of small customers, which represents about half of the activity, shows signs of weakness. Moreover, the return of Octave Klaba, the company's founder, to the position of CEO, with the reunification of the roles of chairman and CEO, marks a change in governance after only one year of Benjamin Revcolevschi's mandate.
Technical Analysis of the Stock
Technically, the stock is now well below its identified support at 10.62 euros, also crossing the lower boundary of the Bollinger bands at 10.85 euros. This breach suggests an acceleration of selling pressure, with the price moving significantly away from its 50-day moving average established at 11.24 euros. The Relative Strength Index (RSI) plunges to 23, a level indicative of overselling, signaling that the downward movement has reached an unusual intensity. However, despite this extreme technical signal, no reversal is observable at this stage of the session, with sellers maintaining the initiative. The MACD, a momentum indicator that measures the difference between two exponential moving averages, displays a negative configuration with a MACD line at -0.09 positioned below its signal line at 0.08, and a histogram at -0.17 indicating an accelerating bearish momentum. This technical setup reinforces the picture of a short-term trend clearly oriented downwards. The Chaikin Money Flow, at 0.14, remains slightly positive, suggesting that capital flows are not yet massively outgoing despite the magnitude of the correction, which may indicate some resistance from a part of the investors. The monthly volatility of the stock, measured at 7.50, remains contained in absolute terms, although the amplitude of the day's movement constitutes an unusual event for this stock whose beta of 0.01 typically reflects a very low correlation with market movements.
Long-Term Trend Analysis
The distance between the 50-day and 200-day moving averages, which fluctuates between 0.46 and 0.61 euro in recent sessions, had until now indicated a relatively stable underlying trend, with the stock evolving in a medium-term bullish channel. The day's collapse questions this balance and brings the price close to the 200-day moving average at 10.64 euros, a level that could act as a major psychological support if selling pressure continues. The next resistance threshold is now at 12.98 euros, a distance of more than 43% from current levels, illustrating the extent of the path to regain a bullish dynamic. The Average True Range, at 0.14 euro, indicates that the daily average variations of the stock were previously limited, making the day's movement all the more exceptional in the usual volatility profile of OVHcloud.
