Oracle Stock Drops 12% in 2025 After Slower Cloud Growth and Revenue Miss

Key Highlights

• Oracle's stock plunged 12% following Q2 results that missed revenue and cloud growth forecasts.
• Earnings per share reached $1.34, surpassing expectations, but revenue of $12.94 billion and cloud growth slowed to 25%, disappointing analysts.
• Forward guidance projected revenue growth between 6% and 8%, slightly below market consensus.

Shares of Oracle Corp. (ORCL) experienced a significant decline after the company’s fiscal second-quarter report revealed a deceleration in both revenue and cloud segment expansion compared to the previous quarter.

Despite adjusted earnings per share rising 11% year-over-year to $1.34 and beating analyst estimates of $1.32, total revenue growth slowed to 5%, reaching $12.94 billion. Cloud revenue increased by 25%, down from 30% growth in the prior quarter, signaling a cooling momentum.

Management’s outlook forecasts revenue growth of 6% to 8% for the upcoming quarter, slightly below the consensus estimate of 7.6%, which contributed to investor uncertainty.

CEO Safra Catz expressed enthusiasm about strong demand for cloud services and generative AI, highlighting Remaining Performance Obligations exceeding $65 billion—surpassing Oracle's annual revenue. CTO Larry Ellison emphasized ongoing expansion with 66 data centers being upgraded and 100 new facilities under construction.

However, increased capital expenditures associated with this rapid expansion raised concerns about operating margins. Ellison reassured investors that Oracle’s infrastructure build-out is more cost-efficient than competitors, while Catz projected Oracle’s recent Cerner acquisition to become a growth driver in the next fiscal year.

At 2:30 p.m. ET, Oracle shares traded down 12% at $100.80, although the stock remains up over 20% year-to-date.

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