- Quarterly revenue grew 14% year on year, but shares are down 11-12% following bad news
- The company is anticipating spending $15 billion more, largely due to AI
- Meta, Nvidia, and OpenAI are all major Oracle customers
Despite a clear drive for AI innovation, investors clearly weren’t happy with Oracle’s higher-than-anticipated AI spend, with shares dropping as much as 11-12% following the announcement.
Higher capital spending and the company missing estimates on sales and profit forecasts ultimately led to a decline in share prices following Oracle’s second-quarter earnings call.
Just halfway through the year and the company has had to adjust its Capex quite significantly – $15 billion more, in fact.
Oracle is spending more than it planned
Investor dissatisfaction comes despite the company posting a healthy 14% rise in quarterly revenue, to $16.1 billion.
Speaking about revised spending expectations, Chairman Larry Ellison noted: “There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”
Oracle growth expectations are driven by Meta and Nvidia commitments, which will help diversify the company’s portfolio, which currently comprises a $300 billion five-year deal with OpenAI.
The cloud computing company was also hit with $406 million in restructuring costs – 387% more than it faced this time last year. 2025 has seen several series of smaller layoffs at the firm, but Oracle does have a $1.6 billion restructuring plan for this fiscal year, so further expenses will continue to roll in under that.
Reassuring investors, Clay Magouyrk reminded us that “Oracle has over 211 live and planned regions worldwide—more than any of our cloud competitors.”
Still, Oracle shares are up 18.9% this year to date, despite being lower than the mid-September high.
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