Oracle Shares Drop After Q2 Revenue Disappoints Despite AI Growth

Oracle (ORCL) experienced a decline in its stock price following the release of its fiscal second-quarter earnings report, which revealed revenue figures below analyst forecasts.

The technology leader posted quarterly revenue of $14.06 billion, marking a 9% increase compared to the previous year but missing the consensus estimates gathered by Visible Alpha. Net income stood at $3.2 billion, or $1.10 per share, surpassing last year's $2.5 billion ($0.89 per share) and beating analyst expectations. However, adjusted earnings per share were $1.47, slightly underperforming projections.

Oracle's Cloud Services division generated $10.81 billion in revenue, a 12% increase year-over-year, while Cloud Infrastructure revenue surged by 52% to $2.4 billion, fueled by what CEO Safra Catz described as "unprecedented AI demand."

These results follow Oracle's stock reaching record highs last week amid investor optimism about the company's position in the growing artificial intelligence market.

Despite strong gains in 2024, with shares up over 80% through Monday's close, Oracle's stock dropped more than 7% in after-hours trading after the earnings announcement.

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