Oracle’s share price fell sharply — around 11% in after-hours trading — after the company released its second-quarter financial results for fiscal 2026. The decline reflects investor disappointment with parts of the earnings print and outlook, even though some results beat expectations.
📊 What Oracle Reported
According to the company’s official earnings release for Q2 FY26:
- Total revenue: ~$16.06 billion (up ~14% YoY), but slightly below analyst expectations (~$16.19 billion).
- Adjusted earnings per share (EPS): $2.26 — well above forecasts.
- Cloud revenue: $8.0 billion (grew ~34% YoY).
- Remaining Performance Obligations (future bookings): surged to ~$523 billion (up ~438%).
Despite cloud growth and a strong backlog, the revenue miss and higher spending disappointed the market.
📉 Why the Stock Slid
Investors reacted negatively primarily due to:
- Revenue slightly missing expectations, undermining confidence.
- Surging capital spending, especially on AI-related data-centre expansion, which raised concerns about near-term profitability and cash flow.
- Guidance and operating cost outlook that suggested heavier spending ahead.
Some analysts highlighted that operating and infrastructure expenses are rising faster than investors had hoped, which put pressure on margins despite solid earnings.
📈 Mixed Market Reaction
While EPS beat estimates, market focus was on the top-line miss and future cost trajectory, prompting fears about growth sustainability relative to investments. This has led to broader tech sector nervousness — with some AI-related names also seeing weakness.
🧠 Investor Takeaways
- Backlog strength signals long-term demand remains robust.
- Cloud expansion and AI strategy are driving future revenue potential.
- But near-term financials (revenue beat and heavy capex) didn’t soothe markets, leading to the ~11% price drop.
