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Oracle stock is down almost 8% after earnings miss and elevated cloud expectations

Dec 10, 2024 - businessinsider.com
Oracle's stock fell nearly 8% after the company reported quarterly earnings that slightly missed estimates and issued weaker-than-expected guidance. Despite this, Oracle's cloud services, driven by AI demand, grew 12% in the last quarter, making up 77% of revenue. The company reported fiscal second-quarter revenue of $14.1 billion, a 9% year-on-year increase, with a profit of $4.21 billion or $1.47 per share. Oracle expects revenue growth between 7% and 9% for the current quarter, below analyst estimates. The stock decline was attributed to high expectations following a bullish September analyst day and long-term growth targets.

Oracle's stock has surged 80% this year, boosting its market value to over $500 billion. The company's cloud services business, which includes customers like OpenAI and Nvidia, is booming due to high demand for AI computing. Oracle competes with Google, Amazon Web Services, and Microsoft in the cloud infrastructure sector. The company announced a deal with Meta to use its AI cloud infrastructure for developing AI models. Oracle's rising stock price has significantly increased the net worth of co-founder and CTO Larry Ellison, making him the third richest person on the Forbes Real-Time Billionaires list.

Key takeaways:

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  • Oracle's stock fell nearly 8% after missing earnings estimates and issuing weaker guidance, despite an 80% surge this year.
  • Oracle's cloud services, driven by AI demand, grew 12% in the last quarter, making up 77% of the company's revenue.
  • The company expects revenue growth between 7% and 9% for the current quarter, below analyst estimates.
  • Oracle announced a deal with Meta to use its AI cloud infrastructure for developing Meta's Llama AI models.
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