Shares of leading chipmakers took a hit in the after-hours trading following Oracle’s earnings announcement, with Nvidia and Advanced Micro Devices both slipping around 1%, and cloud provider CoreWeave retreating over 3%.
The decline came after a sharp sell-off in Oracle, which fell 11% during the afterhours, following the report of its quarterly revenue that missed expectations—even as demand for AI infrastructure continues to expand.
Oracle’s second-quarter earnings figures highlighted a mixed performance. The tech giant posted adjusted earnings per share of $2.26, surpassing analysts’ consensus of $1.64, but delivered revenue of $16.06 billion, falling short of the anticipated $16.21 billion.
For the upcoming fiscal third quarter, the company projected adjusted earnings per share between $1.70 and $1.74 and called for revenue growth in the range of 19% to 21%, which broadly aligns with analysts’ forecasts.
Revenue for the quarter ending November 30 saw a 14% increase from the prior year, while net income reached $6.14 billion, up significantly from the previous year. The company’s cloud revenue exceeded expectations at $7.98 billion, and cloud infrastructure specifically surged 68% year-over-year to $4.1 billion.
Meanwhile, revenues from the software segment declined 3% to $5.88 billion, coming in below analyst projections.
Another highlight was Oracle’s remaining performance obligations, which measure contracted revenue not yet recognized; this surged 438% to $523 billion, surpassing average estimates. Notably, the company’s backlog was driven by new commitments from major technology partners and customers.
Having expanded beyond its roots in database and enterprise software toward cloud infrastructure, Oracle continues to compete with firms like Amazon, Microsoft, and Google—all racing to secure lucrative AI-related business. OpenAI, for example, has committed to spending over $300 billion on Oracle’s infrastructure services over five years.
Despite the strong growth in cloud and backlog, Oracle’s expansion strategy has raised investor concerns regarding its growing debt load and the risk of slowing momentum. The company indicated that it aims to maintain an investment-grade credit rating while exploring alternative financing strategies, including deals with customers and suppliers to provide chips or lease equipment, thereby aligning capital expenditures with incoming payments.
Oracle’s capital expenditure forecast has also risen—expected to hit $50 billion for the full year, up from previous estimates. Free cash flow in the latest quarter came in negative at roughly $10 billion, a wider deficit than analysts had anticipated at $5.2 billion.
Oracle has also undergone top management changes with new CEOs Clay Magouyrk and Mike Sicilia. The company reported a $2.7 billion pre-tax gain from the sale of its stake in chip designer Ampere, reflecting a shift away from producing its own data center chips in favor of a policy supporting all chip types preferred by customers.
