News built for finance pros
CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.
Oracle’s latest earnings report seems fine—but that’s before you remember that we’re living in the proof of concept era of the great AI saga.
Increasingly, analysts want to see companies with ties to AI completely knock it out of the park. When there are any cracks, an otherwise fine-ish earnings report can end up looking like a doozy.
As of Tuesday, Oracle would know. In the software company’s Q2 earnings report, revenue jumped 9% from the prior year to nearly $14.1 billion. Cloud services revenue, which accounted for 77% of the company’s overall revenue, rose 12% from last year to $10.8 billion, CNBC reported.
CEO Safra Catz noted in the company’s earnings call that “record level AI demand drove Oracle Cloud infrastructure revenue up 52%” to $2.4 billion. Catz added that the company expects cloud revenue to reach $25 billion in fiscal 2025.
That all sounds great. Still, the company’s quarterly revenue missed analyst expectations, and shares slid 7% the day after Oracle reported earnings, the biggest dip since December 2023.
But the downbeat reactions to Oracle’s latest report don’t mean the sky is falling for the company that’s made founder Larry Ellison unfathomably wealthy. (Oracle’s latest stock plunge decreased Ellison’s fortune by $15 billion—but he’s got around $200 billion more where that came from, according to Forbes.)
None of the 38 analysts FactSet polled lowered their stock price target for the company, and 14 even raised their projections, Forbes reported. CNBC noted that on Monday, the stock was still up more than 80% for the year, and on track for its best year since 1999, so it’s not like there’s coal in the company’s stocking.