Oracle (ORCL) stock is moving lower out of the gate Tuesday after the cloud infrastructure platform came up short of top- and bottom-line expectations for its fiscal 2025 second quarter.
In the three months ending November 30, Oracle's revenue increased 8.6% year over year to $14.06 billion, boosted in part by a 12.1% surge in its cloud services and license support segment to $10.8 billion. Its earnings per share (EPS) were up 9.7% from the year-ago period to $1.47.
"Record level artificial intelligence (AI) demand drove Oracle Cloud Infrastructure revenue up 52% in Q2, a much higher growth rate than any of our hyperscale cloud infrastructure competitors," said Oracle CEO Safra Catz in a statement. "Growth in the AI segment of our Infrastructure business was extraordinary – GPU consumption was up 336% in the quarter – and we delivered the world's largest and fastest AI SuperComputer scaling up to 65,000 Nvidia H200 GPUs."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, the results missed analysts' expectations. Wall Street was anticipating revenue of $14.1 billion and earnings of $1.48 per share, according to CNBC.
"For fiscal year 2025, we remain very confident and committed to full year total revenue growing double digit and full year total cloud infrastructure growing faster than the 50% reported last year," Catz said on Oracle's conference call.
He added that the company anticipates fiscal third-quarter revenue growth of 7% to 9%, or approximately $14.3 billion at the midpoint, and earnings per share of $1.50 to $1.54. Analysts, meanwhile, are expecting revenue of $14.65 billion and earnings of $1.57 per share.
The company also declared a quarterly dividend of 40 cents per share, payable on January 23 to shareholders of record at the close of business on January 9.
Is Oracle stock a buy, sell or hold?
Oracle shares were up nearly 83% for the year to date on a total return basis (price change plus dividends) through the December 9 close. Unsurprisingly, Wall Street is bullish on the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for the large-cap stock is $192.61, representing implied upside of roughly 10% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm UBS Global Research is one of those with a Buy rating on Oracle and raised its price target to $210 from $200 despite the earnings miss.
While Oracle shares are "cooling off" after earnings, "likely due to the lack of material fiscal second-quarter upside, a continued solid tone on the coming fiscal Q3 and Q4 quarters leaves the core growth acceleration thesis intact," says UBS Global Research analyst Karl Keirstead.
Related Content
-
The Social Security Test Every Wealthy Retiree Must TakeWhen you work and collect Social Security benefits before your FRA, you are subject to the Retirement Earning Test that could result in a temporary reduction of your benefits.
-
I'm a Government Employee and Need to Get By Until the Shutdown Ends. What Can I Do?The second-longest shutdown in history is leaving many federal workers with bills due and no paycheck to cover them. Here's what you can do to get by.
-
I'm a CPA: Control These Three Levers to Keep Your Retirement on TrackThink of investing in terms of time, savings and risk. By carefully monitoring all three, you'll keep your retirement plans heading in the right direction.
-
Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market TodaySHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap.
-
Targa Resources, Take-Two Interactive, Boston Scientific: Why Experts Rate These Stocks at Strong BuyWall Street is highly bullish on these three high-quality stocks.
-
Debunking Three Myths About Defined Outcome ETFs (aka Buffered ETFs)Defined outcome ETFs offer a middle ground between traditional equity and fixed-income investments, helping provide downside protection and upside participation.
-
This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had HolesA couple's disastrous experience with reclaimed wood flooring led to safety hazards and a lesson in the critical importance of detailed contracts.
-
US-China Trade Hopes Send Stocks to New Highs: Stock Market TodayApple and Microsoft are on track to join Nvidia in the $4 trillion market cap club.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and AroundIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
