Oracle Stock Falls After Missed Earnings and Guidance
Introduction
Oracle shares were heading lower in late trading Monday after the enterprise software giant posted earnings and guidance that fell short of investor expectations. The stock slipped 5% after the report and fell further after the company provided November quarter guidance, broadening the loss to more than 8%.
Fiscal First Quarter Performance
- For the fiscal first quarter ended Aug. 31, Oracle reported revenue of $12.45 billion, up 9% from a year ago.
- Adjusted profits were $1.19 a share, above the Wall Street consensus of $1.15 a share.
- Cloud revenue was $4.6 billion, up 30% from a year ago.
- Fusion Cloud ERP, the company’s enterprise software for larger enterprises, was up 21% to $800 million.
Generative AI and Oracle’s Growth
Oracle stock has rallied more than 50% this year on growing expectations that its Oracle Cloud Infrastructure business will get a boost from generative AI workloads. It has outperformed Microsoft, widely considered one of the most important AI software players, by 10 percentage points.
November Quarter Guidance
- For the November quarter, Oracle sees revenue up 5% to 7%.
- Total cloud revenue is expected to grow 29% to 31%.
- Oracle sees profits for the quarter of between $1.30 and $1.34 a share.
Oracle’s Commitment and Future Outlook
Oracle CEO Safra Catz said the company remains committed to its previous FY 2026 financial target of at least $65 billion in revenue. The company is also optimistic about cloud demand and its role in AI.
Partnerships and Events
Oracle has benefited from a strong relationship with Nvidia, which has given Oracle a generous allocation of GPU chips for its AI computing services. The company will also hold a meeting with analysts next week in connection with its annual Oracle Cloud World user conference.
Conclusion
Oracle stock fell after disappointing earnings and guidance, but the company remains committed to its long-term financial goals. With its focus on cloud-based solutions and partnerships in the AI industry, Oracle continues to be a key player in the tech sector.
Source: Barron’s
