Oracle shares continue decline following weak results
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More news: Shares in Oracle continued to slide in premarket US trading on Thursday, slipping almost 11% by 5:30am ET (9:30pm AEDT) after the firm missed Q2 earnings expectations.
The cloud computing provider and database software maker reported softer than expected cloud sales on Wednesday, while expenses on AI data centres and other equipment lifted, despite booming demand for its AI infrastructure.
Other AI players were also dragged down by Oracle’s slump in premarket trading, with Nvidia down 1.7%, Microsoft dipping 0.8%, Coreweave down almost 3% and AMD negative 1.5%.
Investors have been paying close attention to Oracle’s infrastructure revenue in hopes that it is able to convert heavy expenditure and debt to drive AI infrastructure development and commitments to lease sites for data centres.
Oracle shares slump as Q2 revenue gains fall short of expectations
The news: Oracle has delivered softer than expected cloud sales while expenses on AI data centres and other equipment lifted.
The numbers: In extended trade, Oracle shares on the New York stock exchange had fallen 9.6% to USD201.5 by 9:30am AEDT.
Second-quarter cloud sales lifted 34% year on year to USD8 billion while cloud infrastructure revenue lifted 68% to USD4.1 billion, both below market expectations.
Q2 earnings per share lifted 91% to USD2.10, while remaining performance obligations lifted 438% to USD523 billion. Over the last 12 months operating cash flow was up 10% to USD22.3 billion.
Oracle’s board declared a quarterly cash dividend of 50 US cents per share. The record date will be 9 January 2026 with the payment to be made on 23 January.
The context: Investors have been closely watching Oracle’s infrastructure revenue in the hopes it can quickly convert expenditure amid significant levels of debt taken to drive AI infrastructure development and commitments to lease multiple data centre sites.
During the quarter, Oracle also completed the sale of its interest in chip maker Ampere Computing. Oracle chair and chief technology officer Larry Ellison said “we no longer think it is strategic for us to continue designing, manufacturing and using our own chips in our cloud datacenters”.
He said Oracle is “committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers”.
The sources: Oracle media release, Bloomberg, CNBC, WSJ
