Since the Q2 round-off fiscal 2026 Earnings Announcement on December 10, 2025, Oracle Corporation shares are down 4.6%, compared to the 3.3% drop in the S&P 500 as the market as a whole reverses.
Although it was able to beat consensus estimates with an EPS of $2.26 (non-GAAP) 54 % year over year growth, and beat expectations by 38.65%, the stock declined as investors digested high capital spending and debt which was estimated to be 21% over the past year.
Earnings Triumph
The revenues increased 14 % to $16.1 billion as cloud infrastructure increased 68 % to 4.1 billion. The sale of GPUs rose 177 % during an alpha boom in artificial-intelligence by customers, including NVIDIA and Meta.
Q2 Cloud Revenue (IaaS plus SaaS) $8.0 billion, up 34% in USD and up 33% in constant currency.
Oracle Principal Financial Officer, Doug Kehring, said
“Remaining Performance Obligations (RPO) increased by $68 billion in Q2 up 15% sequentially to $523 billion highlighted by new commitments from Meta, NVIDIA, and others,”
Analyst Shifts and Scores
The company projects revenue growth of 16–18% in constant currency (up to 19–21% in USD) for the Q3 of the 2026 fiscal year; however, the guidance for non-GAAP EPS is $1.64–1.68, which is less than the average market expectation (~$1.72).
Oracle continues to make significant investments in AI infrastructure and raises its capital expenditure plan to $50 billion while maintaining its revenue target of approximately $67 billion for the entire year 2026.
The current Zacks Rank of Oracle is 3 (Hold), having a high Momentum A rating and a low Value D rating.
The reason is that the analyst of Goldman Sachs Kash Rangan moved the target price to $220 from $320 due to a neutral position.
Road Ahead
Oracle is faced with a point of reckoning given that the growing pool of customer-driven regions with vast deployments of GPUs mean that the company has never experienced this trend of momentum like in the cloud services industry, but when debts and cash burns are on the increase, the execution risks become critical.
The achievement of success depends on the rapid transformation of a high RPO backlog into long-term revenue streams. The optimism among analysts remains quite low, though, upwards changes in earnings estimates indicate a belief in the AI positioning of Oracle compared to other companies.
An additional explosion further than the recently exhibited resistance spots could happen after the third quarter achieves its pledges concerning the quickening of cloud development, particularly regarding any multicloud partnerships and adopting AI in the enterprise.
The risk-takers believe Oracle to be a high conviction AI infrastructure investment with tailwinds exceeding billions of dollars.
Even the gamble of capital expenditure by patient capital might be compensated as data-center capacity is realized in operation, but in short term volatility strategic entrance points should be favored over pursuing momentum.
