After an impressive 81% climb in Oracle Corp.’s shares this year, the company faced a sharp drop in after-hours trading Monday, declining more than 7% due to lackluster fiscal second-quarter earnings that fell short of market expectations.
Oracle reported $14.06 billion in revenue for the quarter, just below the $14.12 billion forecasted by analysts polled by FactSet. This slight miss was enough to temper investor enthusiasm, especially given the stock’s recent rally driven by optimism around Oracle’s cloud partnerships and artificial intelligence momentum.
Despite the revenue shortfall, Oracle touted significant growth in its AI and cloud businesses. Chief Executive Safra Catz highlighted "record-level AI demand" that fueled a 52% year-over-year increase in Oracle Cloud Infrastructure (OCI) revenue — outpacing growth rates reported by other hyperscale cloud providers. GPU consumption within Oracle’s AI segment surged 336%, a standout metric for the quarter, Catz noted.

Additionally, the company reported 50% growth in remaining performance obligations (RPO), which reached $97 billion, indicating robust future revenue potential. "Our already impressive growth rates will continue to climb even higher," Catz said in a statement.
On the earnings front, Oracle’s adjusted earnings per share came in at $1.47, narrowly missing the FactSet consensus of $1.48. GAAP net income for the quarter rose to $3.15 billion, or $1.10 per share, compared to $2.50 billion, or 89 cents per share, in the same period last year.
The company announced a major new partnership with Meta Platforms Inc., which plans to leverage Oracle’s AI Cloud Infrastructure. While the Meta deal was not reflected in second-quarter results, it is expected to contribute to third-quarter performance. “Our win rates are growing higher, with the recent win at Meta being a prime example,” Catz said during the earnings call.
Kirk Materne, an analyst at Evercore ISI, remarked that the results were solid but lacked the blowout figures some investors might have hoped for, particularly in OCI and RPO growth.
Conclusion
Oracle’s second-quarter results underscore its strong positioning in AI and cloud infrastructure, but the slight revenue and earnings misses suggest the stock’s recent surge may have outpaced expectations. While the Meta partnership and robust RPO growth indicate a promising outlook, the company will need to sustain its momentum to satisfy heightened market anticipation moving forward.