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Oracle misses expectations and guidance was also weak, sending its stock lower
- Oracle's stock fell in extended trading after missing analysts' expectations and reporting lower-than-expected financial results for the third quarter of fiscal year 2025.
- The company's earnings came in at $1.47 per share, below the forecast of $1.49 per share, with revenue of $14.13 billion missing the analyst target of $14.39 billion.
- Despite revenue growth, Oracle also fell short of estimates in key segments like cloud services and license support, with revenue increasing by 10% to $11.01 billion.
- Oracle's cloud infrastructure segment saw rapid growth, with revenue up 49% to $2.7 billion, driven by customer demand and the introduction of the Oracle AI Data Platform.
- The company announced plans to double its data center capacity this year to meet customer demand and highlighted investments in AI initiatives like the Stargate Project alongside partners including OpenAI.
- Oracle's performance obligations saw a significant increase, reaching $130 billion, exceeding the estimated $103.3 billion.
- Despite concerns about overspending in cloud infrastructure, Oracle signed cloud agreements with major companies, aiming for a 15% revenue increase in the next fiscal year.
- Oracle's guidance for the current quarter fell short of Wall Street's expectations, with revenue growth projected at 8-9% and earnings expected to range from $1.61 to $1.65 per share, lower than analysts' forecasts.
- Investors displayed skepticism and Oracle's stock declined by 4% in extended trading following a general market downturn and concerns over economic uncertainty.
- Despite challenges, Oracle benefits from its own infrastructure and direct integration of AI models, which shields it from rising compute costs and adoption barriers faced by cloud rivals.
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