After Monday's close Eastern Time, Oracle announced its second quarter financial report. As the "hot Crispy fried chicken" in the American stock AI boom this year, the performance of this popular AI stock failed to surprise investors.
At the same time, Oracle's performance expectations for the next fiscal quarter were more conservative than analysts' expectations, which greatly disappointed investors. The company's stock price fell more than 7% in after hours trading.
According to the financial report, in the second quarter ending on November 30th,
Adjusted earnings per share (EPS) were $1.47, a slight year-on-year increase of 9.7%, lower than the expected $1.48;
Revenue of $14.06 billion, a year-on-year increase of 9%, slightly below expectations of $14.1 billion;
Net profit increased by 26% year-on-year to $3.15 billion, compared to $2.5 billion in the same period last year.
According to data from key departments,
Oracle Cloud Services revenue increased by 12% year-on-year to $10.81 billion, accounting for 77% of total revenue.
The revenue of the cloud infrastructure department surged 52% year-on-year to $2.4 billion.
Cloud infrastructure is Oracle's biggest growth engine, and it is also a business area that competes fiercely with tech giants such as Amazon, Microsoft, and Google. Due to the soaring demand for computing power capable of handling artificial intelligence projects, the industry is thriving.
Industry research analyst Anurag Rana wrote that Oracle's cloud infrastructure revenue grew by 52%, indicating a strong expansion of artificial intelligence workloads for both direct and indirect customers.
Oracle stated that it has just signed an agreement with Meta authorizing Meta to use its infrastructure to assist in various projects related to the Llama series of large-scale language models.
Oracle Cloud Infrastructure has trained several of the world's most important generative artificial intelligence models because we are faster and cheaper than other clouds, "said Larry Ellison, founder of Oracle, in a statement
The outlook for the next fiscal quarter is also lower than expected
Oracle expects its revenue to increase by 7% to 9% year-on-year in the current quarter, which means the median expected revenue will be around $14.3 billion. Less than analysts' previous estimate of $14.65 billion.
The expected adjusted earnings per share are between $1.50 and $1.54, while analysts expect earnings per share to be $1.57.
Rishi Jaluria, Capital Markets Analyst at Royal Bank of Canada, wrote that this quarterly report is "mixed and contrary to high expectations".
In September of this year, Oracle raised its revenue forecast for the 2026 fiscal year to $66 billion, which is about $1.5 billion higher than analysts' expectations. Oracle also announced in the same month that its cloud computing division would begin accepting customer orders for artificial intelligence model training and related tasks.
As of Monday's close, the stock has risen over 80% this year and is expected to achieve its best annual performance since 1999.