Oracle shares fell by 7% in after-hours trading on Monday following the release of its fiscal second-quarter results, which missed analysts’ expectations, and a weaker-than-expected forecast for the coming quarter. The company reported earnings per share of $1.47, slightly below the $1.48 analysts had predicted, and revenue of $14.06 billion, which fell short of the $14.1 billion forecast. Despite the miss, Oracle’s revenue grew by 9% year-over-year, and its net income increased by 26%, rising to $3.15 billion, or $1.10 per share, up from $2.5 billion, or 89 cents per share, in the same period last year.
The company’s cloud services business showed a notable 12% growth year-over-year, reaching $10.81 billion, which made up 77% of total revenue. Oracle’s cloud infrastructure business, which competes with Amazon, Microsoft, and Google, saw significant growth, with a 52% year-over-year revenue increase to $2.4 billion. This surge is attributed to the growing demand for computing power to support artificial intelligence (AI) projects.
In a statement, Oracle founder Larry Ellison emphasized the company’s competitive edge, claiming that Oracle Cloud Infrastructure was “faster and less expensive than other clouds,” making it a preferred platform for training generative AI models. Ellison also announced a new agreement with Meta, where Oracle’s infrastructure will be used for Meta’s AI projects related to its Llama family of large language models.
For the upcoming quarter, Oracle forecasts a revenue growth of 7% to 9%, translating to approximately $14.3 billion at the midpoint. However, this is below the analysts’ expectation of $14.65 billion. The company also projects adjusted earnings per share in the range of $1.50 to $1.54, lower than the expected $1.57.
Despite the short-term setbacks, Oracle had previously raised its fiscal 2026 revenue guidance to $66 billion, surpassing analysts’ projections by about $1.5 billion. The company is also moving forward with a new computing cluster project, utilizing over 131,000 Nvidia “Blackwell” graphics processing units for AI model training.
Despite the challenges in the second quarter, Oracle’s stock is up more than 80% this year, poised for its best annual performance since 1999.
