Oracle shares sank 11% in extended trading on Wednesday after the database software maker reported lower quarterly revenue than expected despite booming demand for its artificial intelligence infrastructure.
AI-related stocks were hit following the report with, chipmakers Nvidia and Advanced Micro Devices each dropping about 1% and cloud provider CoreWeave sliding more than 3%.
Here’s how Oracle did in comparison with LSEG consensus:
- Earnings per share: $2.26 adjusted vs. $1.64 expected
- Revenue: $16.06 billion vs. $16.21 billion expected
With respect to guidance, Oracle called for $1.70 to $1.74 in adjusted earnings per share and 19% to 21% revenue growth for the fiscal third quarter. The LSEG consensus included $1.72 in earnings per share and $16.87 billion in revenue, implying 19% growth.
Oracle’s fiscal second-quarter revenue grew 14% from a year ago in the quarter that ended Nov. 30, according to a statement. Net income, rose to $6.14 billion, or $2.14 per share, from $3.15 billion, or $1.13 per share, in the same quarter a year earlier. Adjusted earnings exclude stock-based compensation.
The company posted $7.98 billion in cloud revenue, more than the $7.92 consensus among analysts polled by StreetAccount. Cloud infrastructure revenue totaled $4.1 billion, up 68%. Oracle also pointed to cloud business from Airbus, Canon, Deutsche Bank, LSEG, Panasonic and Rubrik.
Software revenue fell 3% to $5.88 billion, missing the $6.06 billion average analyst estimate.
Remaining performance obligations, a measure of contracted revenue that hasn’t yet been recognized, soared 438% to $523 billion, topping the $501.8 billion average analyst estimate, according to StreetAccount. Doug Kehring, Oracle’s principal financial officer, said in the release that RPO were driven “by new commitments from Meta, Nvidia and others.” The company now expects $4 billion in additional revenue in fiscal 2027, Kehring said.
Over the past decade, Oracle has diversified its business beyond databases and enterprise software and into cloud infrastructure, where it competes with Amazon, Microsoft and Google. Those companies are all vying for big AI contracts and are investing heavily in data centers and hardware necessary to meet expected demand.
OpenAI, which sparked the generative AI rush with the launch of ChatGPT three years ago, has committed to spending more than $300 billion on Oracle’s infrastructure services over five years.
Oracle’s report lands at a critical moment for the company, which has tried to position itself at the center of the AI market by committing to massive build-outs. While the move has been a boon for Oracle’s revenue and its backlog, investors have grown concerned about the amount of debt the company is raising and the risks it faces should the momentum slow.
On the company’s earnings call, Kehring committed to keeping Oracle’s investment-grade debt rating.
“In addition, there are other financing options through customers that may bring their own chips to be…
Read More: Oracle (ORCL) Q2 earnings report 2026
