Oracle stock came under significant pressure after its fiscal fourth-quarter results, tumbling nearly 10% in an after-hour trading as investors zeroed in on weaker-than-expected results from its cloud operations. The share price is now trading at $182 per share.
After the market closed, the company reported adjusted earnings of $2.11 per share on revenue of $19.18 billion for the quarter, surpassing Wall Street forecasts of $1.96 in earnings and $19.1 billion in revenue, according to LSEG consensus data. However, these headline beats failed to boost sentiment due to concerns regarding Oracle’s cloud segment performance.
Oracle’s total cloud revenue, which includes both Cloud Applications and Cloud Infrastructure, reached $9.91 billion. This figure came in just under analyst projections of $9.99 billion. Looking closer, Cloud Infrastructure revenue was $5.79 billion, narrowly exceeding estimates of $5.72 billion. Despite surpassing this metric, the small margin did little to alleviate investor disappointment.
On a positive note, Oracle’s remaining performance obligations—an indicator of contracted future cloud revenue—increased to $638 billion, outpacing the anticipated $589.5 billion. This suggests durable long-term demand for Oracle’s cloud services, a measure closely tracked by the market amid the ongoing expansion in artificial intelligence.
Still, short-term concerns over cloud growth took precedence, overshadowing the strength in contracted backlog.
Broader pressures in the technology sector also weighed on Oracle shares. The downturn affecting AI and semiconductor stocks reflects investor caution over the costs of AI development and uncertainty surrounding the macroeconomic environment, leading to asset reallocation across the sector.
