Oracle reported a cloud revenue result that landed below expectations, leaving investors uneasy about how long its massive AI booking wave will take to turn into steady cash.
Fiscal second-quarter cloud sales climbed 34 percent to $7.98 billion, but the figure missed analyst forecasts. The slower payoff timing now sits at the center of market debate.
This report marked the first major cloud test for the new leadership team running the company after a high-profile executive shift.
Revenue from the infrastructure unit jumped 68 percent to $4.08 billion in the same period, yet that number also came in just under projections.
Oracle said the remaining performance obligation reached $523 billion for the quarter that ended November 30.
Analysts on the Wall Street trading floor had expected about $519 billion, showing demand stayed strong even as near-term revenue lagged today. Oracle’s bookings figure showed future work piling up, but the timing of when that money hits income remains uncertain.
Investors question spending as data center build speeds up
Oracle built its cloud push on its old database base and then chased bigger names in modern computing. The current expansion is tied tightly to a large data center build meant to support AI workloads for OpenAI.
Major platform clients also include TikTok under ByteDance and Meta Platforms. These customers help explain the surge in infrastructure demand even as questions grow about the cost of keeping those sites running nonstop.
Spending pressure showed up clearly in the quarter. Capital expenditures reached about $13 billion, up from $8.5 billion in the prior period. Back in September, the company projected full-year capital spending of $35 billion. Analysts had modeled only $8.25 billion for the latest quarter, which widened the gap between expectations and what was actually spent. The higher outlay reflects land, power, hardware, and network commitments tied to multiple new locations leased to expand computing capacity. These sites are meant to meet AI demand that has not yet fully turned into recognized sales on books.
CEO Clay Magouyrk said, “Oracle is good at building and running high-performance and cost-efficient cloud data centers,” adding that automation lets more sites be built and operated at scale. The stock dropped five percent in extended trading after closing at $223.27 in New York. Shares are down about one-third since September 10, when excitement around the cloud unit pushed the company to a record high. This report was also the first since Safra Catz handed the chief executive role to Magouyrk and Mike Sicilia.
Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program
