- Quarterly revenue was up 14% year over year, but shares are down 11-12% on bad news.
- The company plans to spend an additional $15 billion, largely on AI.
- Meta, Nvidia and OpenAI are all major Oracle customers
Despite a clear drive for AI innovation, investors were clearly unhappy with Oracle’s higher-than-expected AI spending, with shares falling 11-12% after the announcement.
Higher capital expenditures and the lack of estimates on sales and profit forecasts ultimately led to a decline in stock prices after Oracle’s second-quarter results were released.
Just halfway through the year, the company had to adjust its investments quite significantly – $15 billion more, in fact.
Oracle spends more than expected
Investor discontent comes despite the company posting a healthy 14% rise in quarterly revenue to $16.1 billion.
Speaking about the revised spending expectations, Chairman Larry Ellison said: “There will be a lot of changes in AI technology over the next few years and we must remain agile in response to these changes. »
Oracle’s growth expectations are driven by commitments from Meta and Nvidia, which will help diversify the company’s portfolio, which currently includes a five-year, $300 billion deal with OpenAI.
The cloud computing company also faced $406 million in restructuring costs, 387% more than it faced this time last year. The year 2025 saw several rounds of minor layoffs at the company, but Oracle has a $1.6 billion restructuring plan for this fiscal year, so additional expenses will continue to pile up as part of that.
To reassure investors, Clay Magouyrk recalled that “Oracle has more than 211 active and planned regions around the world, more than any of our cloud competitors”.
Still, Oracle shares are up 18.9% this year so far, although they are below the mid-September high.
Follow TechRadar on Google News And add us as your favorite source to get our news, reviews and expert opinions in your feeds. Make sure to click the Follow button!
And of course you can too follow TechRadar on TikTok for news, reviews, unboxings in video form and receive regular updates from us on WhatsApp Also.
