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Oracle has some new deals with big AI names. That news wasn’t enough to keep its stock from plummeting late Wednesday after the company released its quarterly results.
The cloud infrastructure giant said Wednesday new agreements with AI chipmaker Nvidia (NVDA) and Meta Platforms (META) helped drive its backlog to a record $523 billion. However, Oracle’s fiscal second-quarter revenue of $16.06 billion, while up 14% from the year-ago period, came in below analysts’ estimates, offsetting better-than-expected adjusted earnings of $2.26 per share.
Oracle (ORCL) shares were down 11% in recent after-hours trading.
Why This Matters to Investors
Oracle’s stock has pulled back recently—after a big run-up in the wake of the company’s earnings report in September—amid worries about an AI bubble and its reliance on a few big customers in the AI space. The stock’s drop in extended trading Wednesday suggests the latest results weren’t enough to alleviate those concerns.
Heading into Wednesday night’s results, Wall Street analysts warned Oracle would face a challenging setup, with investors likely to be watching closely for signs demand for Oracle’s AI offerings is broad-based.
The company’s shoutout to heavy AI spender Meta may not have soothed those concerns, and its commitments from Nvidia, which is a big supplier of Oracle’s chips, could underscore worries about circular deals.
Looking ahead, Oracle said it sees adjusted earnings per share of $1.70 to $1.74 for the third quarter, in line with analysts’ estimates. Oracle’s forecast of 19% to 21% revenue growth was above projections.
As of Wednesday’s close, shares of Oracle have fallen about 35% from their September highs. The stock is still up around 33% since the start of the year, but that pales with its 100% year-to-date gain in September.
