Shares of Oracle (ORCL) are down 7% after the database software company reported Fiscal second-quarter financial results that missed Wall Street targets across the board.
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The Texas-based company reported earnings per share (EPS) of $1.47, which missed the consensus forecast of $1.48 among analysts. Revenue in the quarter totaled $14.06 billion, which fell short of the $14.10 billion expected on Wall Street. Oracle’s sales were up 9% from a year earlier.
Breaking down the results, management at Oracle said that revenue in the company’s cloud services business increased 12% from a year earlier to $10.81 billion, accounting for 77% of total revenue. The company’s biggest growth driver has been cloud infrastructure, where it’s competing head-to-head against the likes of Amazon (AMZN) and Microsoft (MSFT).
Cloud Infrastructure Sales Soar
Management at Oracle added that they continue to see soaring demand for computing power that can run artificial intelligence (AI) applications and models. Revenue in Oracle’s cloud infrastructure unit skyrocketed 52% from a year ago to $2.4 billion during Fiscal Q2.
The company’s leadership team also signed an agreement with Meta Platforms (META) during the quarter. That deal will see Meta use Oracle’s cloud computing service to help with its various AI projects and large language models. The company most recently hiked its Fiscal 2026 revenue guidance to $66 billion, which was about $1.5 billion more than what Wall Street had anticipated.
ORCL stock is up 83% this year and on pace for its best annual performance since 1999.
Is ORCL Stock a Buy?
The stock of Oracle has a consensus Moderate Buy rating among 31 Wall Street analysts. That rating is based on 19 buy and 12 Hold ratings assigned in the last three months. The average ORCL price target of $182.96 implies 4.06% downside risk from current levels.
