On December 10, 2025, Oracle stock lost over 10% in after-hours trading when the company released its fiscal second-quarter revenue report, which was not as high as the expectations of analysts were along Wall Street.
The company generated a revenue of $16.06 billion, corresponding to 14% year-on-year growth, but this was still lower than the $16.21 billion projection made by analysts.
The growth is seen to be a large one, but the market players reacted negatively to the result which can be said to have indicated that there is a fear about the ability to maintain the performance in the light of the increased debt commitments and competition in the market.
Powerful Artificial Intelligence and Cloud Growth
The artificial-intelligence-driven section of Oracle, the Oracle Cloud Infrastructure (OCI), gained 68% in revenue with a value of $4.08 billion, which is consistent with the outside projections.
This division is considered to be one of the opportunities to focus on and move with the environmental forces of strategic collaboration with such giants in the industry as Meta and Nvidia.
Oracle Corp. is doubling down on its artificial intelligence (AI) ambitions, forecasting a $15 billion increase in capital expenditures for fiscal 2026 to fulfill a record-breaking $523 billion backlog, along with an additional $4 billion in sales by fiscal 2027 amid faster backlog conversion.
Oracle Chairman and CTO, Larry Ellison Said
“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from NVIDIA, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”
Profits Are Better Than Expected, However Investor Trust Lost
The earnings per share (EPS) of Oracle stood at $2.26, which is significantly higher in comparison to the $1.64 that analysts expected and more than the $1.47 at the time of the year before.
However, this profitability was short-lived, as after closing at a share price of $101.91, it dropped more than 12% on overnight trading, indicating that investors are worried about the fact that Oracle is increasing in debt and relying on its AI-growth forecasts which may not be as optimistic as the share price was.
Further Potential and Market Pessimism
Researchers warn that the massive debt base and interactivity of Oracle in complex financing deals on AI projects are adding more layers of risk, as the market bubble on AI cools down.
The cost of credit-default swaps, which is a measure of the risk of debt, stood at its high point since 2009, which indicates increased cautionary measures by bond holders.
As the AI and cloud contracts offered by Oracle ensure the significant revenue predictability, the market will closely observe whether the company will be able to maintain the growth without increasing the financial risk.
One of the things that will define whether Oracle is able to regain investor faith or face additional equity fluctuation, as it enters the year 2026, is its ability to innovate in the field of AI and de-risk its revenue streams by having a variety of options beyond the large-scale contracts.
