Oracle Corp. shares fell 11% in early trading after the company reported a jump in spending on AI data centers and other equipment, rising outlays that are taking longer to translate into cloud revenue than investors want.
Fiscal second-quarter cloud sales increased 34% to $7.98 billion, while revenue in the company’s closely watched infrastructure business gained 68% to $4.08 billion. Both numbers fell just short of analysts’ estimates.
Known for its database software, Oracle has recently found success in the competitive cloud computing market. It’s engaging in a massive data center build-out to power AI work for OpenAI and also counts companies such as ByteDance Ltd.’s TikTok and Meta Platforms Inc. as major cloud customers.
Remaining performance obligation, a measure of bookings, jumped more than fivefold to $523 billion in the quarter, which ended Nov. 30, the company said Wednesday in a statement. Analysts, on average, estimated $519 billion, according to data compiled by Bloomberg.Play Video
Still, Wall Street has raised doubts about the costs and time required to develop AI infrastructure at such a massive scale. Oracle has taken out significant sums of debt and committed to leasing multiple data center sites.
