- Quarterly revenue grew 14% year over year, but the stock fell 11% to 12% following the bad news.
- The company plans to spend $15 billion more, largely due to AI.
- Meta, Nvidia and OpenAI are Oracle’s main customers
Despite a clear push for AI innovation, investors were clearly unhappy with Oracle’s higher-than-expected AI spending, and the stock fell as much as 11-12% following the announcement.
Higher capital spending and the company’s lack of sales estimates and earnings forecasts ultimately led to a drop in stock prices following Oracle’s second-quarter earnings call.
We’re barely halfway through the year and the company has had to adjust its Capex quite significantly: $15 billion more, in fact.
Oracle is spending more than planned
Investor dissatisfaction comes even though the company posted a healthy 14% increase in quarterly revenue to $16.1 billion.
Speaking about the revised spending expectations, Chairman Larry Ellison noted: “There will be many changes in AI technology in the coming years and we must remain agile in response to those changes.”
Oracle’s growth expectations are driven by commitments from Meta and Nvidia, which will help diversify the company’s portfolio, which currently comprises a five-year, $300 billion deal with OpenAI.
The cloud computing company was also hit with $406 million in restructuring costs, 387% more than it faced this time last year. There have been several minor layoffs at the company in 2025, but Oracle has a $1.6 billion restructuring plan for this fiscal year, so more expenses will continue to pile up.
To reassure investors, Clay Magouyrk reminded us that “Oracle has more than 211 active and planned regions worldwide, more than any of our cloud competitors.”
Still, Oracle shares are up 18.9% so far this year, despite being below a mid-September high.
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