Oracle Corp (NYSE:ORCL, ETR:ORC) shares are down around 7.8% following the release of its fiscal second quarter 2025 earnings, as investors reacted to results that fell short of expectations and a cautious outlook for the coming quarter.
The company reported earnings per share of $1.47, slightly below the anticipated $1.48, and revenue of $14.06 billion, missing the $14.12 billion forecast by analysts.
Despite a 52% year-over-year surge in cloud infrastructure revenue, the overall performance failed to meet the high expectations set by Oracle's impressive 80% stock rally earlier in the year.
Analysts from Bank of America maintained a neutral rating on Oracle, noting that while cloud momentum showed signs of slowing, the company is still on track for acceleration.
They highlighted that the expected OCI (Oracle Cloud Infrastructure) growth acceleration in Q4 depends heavily on GPU capacity, introducing some uncertainty.
UBS analysts remained more optimistic, reiterating a "Buy" rating and raising their price target to $210. They emphasized that despite the stock's after-earnings decline, Oracle's core growth acceleration thesis remains intact.
"If there was anything to explain the after-market movement in the stock, apart from the lack of significant upside in the second quarter ending in February, it may be: a) The guidance for the third quarter ending in February, which projects total revenue growth of 9-11% and Cloud revenue growth of 25-27%, was only aligned with the high end of expectations and fell short at the mid-to-low end.
"The anticipated growth acceleration appears to be more weighted toward the fourth quarter, driven by the timing of data center capacity expansions becoming operational (many in February) as well as Software-as-a-Service (SaaS) bookings, which are expected to be more heavily concentrated in the fourth quarter."
Analysts also noted that earnings per share (EPS) numbers for the second half of the fiscal year are being impacted by investment losses, possibly related to Cohere.
Oracle reaffirmed guidance for total revenue and cloud infrastructure segment acceleration in the second half of the fiscal year.