Oracle Corporation reported its fiscal second-quarter results for the three months ending in November, with revenue of $16.06 billion. This figure was below the $16.21 billion projected by financial analysts. Following the announcement, Oracle's shares decreased by over 10% in after-hours trading.
Financial Performance
Oracle's overall revenue increased by 14% during the reporting period. The company's Oracle Cloud Infrastructure (OCI) business reported a 68% increase in sales.
Market performance for Oracle's stock has seen fluctuations. The stock decreased by 40% from its peak three months prior, yet it has shown an increase of over a third since the beginning of the current calendar year.
Strategic Developments and Executive Commentary
In September, Oracle finalized a five-year contract to provide $300 billion in computing power to OpenAI.
Larry Ellison, Oracle's Chairman and Chief Technology Officer, commented on the evolving landscape of artificial intelligence technology. He stated the necessity for organizational agility in response to anticipated changes in AI technology. Ellison also outlined a "chip neutrality" policy, indicating Oracle's intent to acquire chips from various manufacturers, including Nvidia, to fulfill client requirements. He further stated that Oracle plans to continue purchasing the latest GPUs from Nvidia while preparing to deploy other chips based on customer demand.
Analyst Observations
Emarketer analyst Jacob Bourne provided observations on Oracle's earnings report. Bourne noted investor examination regarding Oracle's partnership with OpenAI, particularly concerning OpenAI's profitability.
Bourne also highlighted increased scrutiny concerning Oracle's accumulating debt, which has been used to finance data center construction. In September, Oracle completed an $18 billion bond sale, an issuance described as one of the largest in the technology sector. Bourne suggested that the reported revenue figure could increase investor concerns regarding the OpenAI agreement and Oracle's expenditures related to AI infrastructure.