Oracle Corporation’s shares tumbled more than 6% in after-hours trading on Wednesday after fiscal second quarter revenue came in at $16.1 billion.
The figure marked a 14% rise from the prior year but fell short of Wall Street’s consensus of $16.2 billion.
The miss underscores investor scrutiny on the database giant’s aggressive expansion into AI-driven cloud infrastructure amid broader market jitters over earnings.
Capex balloons on data centre buildout
Capital expenditures soared to $12 billion, well above the $8.4 billion anticipated by analysts.
This spike reflects Oracle’s massive investments in data centres to support surging demand for AI computing power.
CEO Larry Ellison’s firm highlighted commitments from major clients like OpenAI, fueling the infrastructure spend but raising debt concerns.
Shares, which had rallied post-September earnings on a $300 billion OpenAI deal, have since erased those gains.
RPO climbs, but AI worries persist
Remaining performance obligations, a key backlog metric, grew 15% to $523 billion in the three months ended November.
This signals robust future revenue potential from AI contracts with partners, including Meta and Nvidia.
However, mounting borrowing needs and OpenAI’s long-term payment capacity have spooked investors, with credit default swaps at 2009 highs.
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