By Juby Babu and Stephen Nellis Dec 10 (Reuters) - Oracle forecast sales and profit that missed analyst estimates on Wednesday, while saying that spending would rise by $15 billion compared with earlier estimates - a sign that big capital outlays to chase AI cloud-computing customers is not turning ​into profit as fast as Wall Street had expected. Shares of the Austin, Texas-based company slumped 10% in extended trading. Oracle has leapt to renewed prominence ‌with grand plans to build AI cloud data ce ...

Core Insights - Oracle reported an increase in remaining performance obligations for the second quarter, attributed to strong demand for its cloud infrastructure services as businesses accelerate their adoption of artificial intelligence [1] Group 1 - The growth in remaining performance obligations indicates a positive trend in Oracle's cloud service segment, reflecting robust market demand [1] - The company's focus on cloud infrastructure is aligned with broader industry trends towards digital transformation and AI integration [1]

Core Viewpoint - Oracle is positioned at the forefront of the artificial intelligence boom, but concerns about its rising debt and potential risks in the AI market are growing among investors [2]. Group 1: Financial Performance Expectations - Analysts expect Oracle's revenue to increase by 15% in the fiscal second quarter, reaching approximately $16.21 billion, up from $14.1 billion a year earlier [1][8]. - Cloud revenue is anticipated to be around $7.92 billion, while software revenue is expected to be approximately $6.06 billion [1]. Group 2: Market Position and Competition - Over the past decade, Oracle has diversified into cloud infrastructure, competing with major players like Amazon, Microsoft, and Google, all of whom are heavily investing in AI-related data centers and hardware [4]. - OpenAI has committed to spending over $300 billion on Oracle's infrastructure services over the next five years, highlighting Oracle's role in the AI sector [5]. Group 3: Stock Performance and Investor Sentiment - Oracle's stock experienced a significant decline of 23% in November, marking its worst monthly performance since 2001, and is currently 33% below its record high from September [3]. - Despite the recent downturn, Oracle's shares are up 33% for the year, outperforming the Nasdaq's 22% gain during the same period [3]. Group 4: Debt and Risk Concerns - Oracle raised $18 billion during the recent period, one of the largest issuances for a tech company, leading to increased investor skepticism reflected in the rising prices of five-year credit default swaps [6]. - Analysts express concerns about customer concentration and the company's ability to manage its debt, with RBC analyst Rishi Jaluria questioning how Oracle will finance its growth [7].

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Core Insights - Oracle Corporation reported significant growth in its fiscal 2026 Q2 results, with Total Remaining Performance Obligations increasing by 438% year-over-year to $523 billion, indicating strong future revenue potential [1][5] - The company achieved total quarterly revenues of $16.1 billion, up 14% in USD and 13% in constant currency, driven primarily by a 34% increase in cloud revenues [1][5] - Oracle's GAAP earnings per share rose by 91% to $2.10, while non-GAAP earnings per share increased by 54% to $2.26, reflecting strong operational performance [2][5] Financial Performance - Total Remaining Performance Obligations reached $523 billion, up 438% year-over-year [1][5] - Total revenues for Q2 were $16.1 billion, representing a 14% increase in USD and a 13% increase in constant currency [1][5] - Cloud revenues amounted to $8.0 billion, up 34% in USD and 33% in constant currency [1][5] - Software revenues decreased by 3% in USD to $5.9 billion, down 5% in constant currency [1][5] Income Metrics - Q2 GAAP operating income was $4.7 billion, while non-GAAP operating income was $6.7 billion, reflecting a 10% increase year-over-year in USD [2][5] - GAAP net income was reported at $6.1 billion, with non-GAAP net income at $6.6 billion, marking a 57% increase in USD [2][5] - Q2 GAAP earnings per share increased by 91% to $2.10, and non-GAAP earnings per share rose by 54% to $2.26 [2][5] Cash Flow and Deferred Revenues - Short-term deferred revenues stood at $9.9 billion [3] - Operating cash flow over the last twelve months was $22.3 billion, up 10% in USD [3] Strategic Initiatives - Oracle's Remaining Performance Obligations increased by $68 billion in Q2, driven by new commitments from major clients like Meta and NVIDIA [4] - The company is transitioning to a policy of chip neutrality, focusing on collaboration with various CPU and GPU suppliers to enhance flexibility in its cloud datacenters [4] - Oracle is investing in AI technologies, embedding AI across its software products to automate complex processes and improve service offerings [4] Dividend Announcement - The board of directors declared a quarterly cash dividend of $0.50 per share, payable to stockholders of record as of January 9, 2026 [4]

Core Viewpoint - Oracle Corp may possess the most valuable and regulated dataset in the AI sector, which cannot be easily replicated or accessed by competitors [1][5][6] Group 1: Oracle's Unique Position in Healthcare Data - Oracle's acquisition of Cerner is now seen as a significant advantage in the AI space, as it provides access to critical healthcare data that is essential for AI models [2][5] - The company operates within hospitals, insurers, and clinical workflows, generating data that is legally restricted from other AI models [2][3] - Competitors like Microsoft, Amazon, and Alphabet are limited in their AI capabilities without access to regulated medical data [3][4] Group 2: Importance of Compliance in AI - The AI boom in medical diagnostics and predictive analytics requires datasets with clear provenance and compliance with regulations such as HIPAA [3][4] - Oracle's control over compliant healthcare data is more valuable than access to GPU capacity, as it ensures reliability and regulatory adherence [4] Group 3: Market Perception and Future Potential - Wall Street has not fully recognized the potential of Oracle's healthcare data business, which could become a significant revenue stream if healthcare AI evolves into a trillion-dollar market [5][6] - The upcoming earnings report will highlight cloud growth and AI demand, but the real opportunity lies in the healthcare unit that remains undervalued by investors [5][6]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - AI data centers consume energy equivalent to that of small cities, leading to concerns about power grid strain and rising electricity prices [2] - The company in focus is positioned to capitalize on the surge in demand for electricity driven by AI advancements [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, benefiting from the increasing need for energy infrastructure [4][5] - It possesses significant nuclear energy infrastructure assets, making it a pivotal player in the U.S. energy strategy [7] - The company is noted for its capability to execute large-scale engineering, procurement, and construction projects across various energy sectors [7] Financial Position - The company is completely debt-free and has a substantial cash reserve, amounting to nearly one-third of its market capitalization [8] - It is trading at less than 7 times earnings, indicating a potentially undervalued investment opportunity [10] Market Trends - The company is linked to the onshoring trend driven by tariffs, which is expected to boost domestic manufacturing and energy needs [5][14] - There is a growing interest from hedge funds in this company, suggesting it is gaining recognition as a valuable investment [9][10] Future Outlook - The future of AI is closely tied to energy advancements, with a strong emphasis on the need for innovative energy solutions to support AI growth [12][13] - The company is positioned to benefit from the anticipated AI infrastructure supercycle and the surge in U.S. LNG exports [14]

Oracle reporting earnings. Sema Modi here with more on what to watch out for this afternoon. Sema >> Sarah and Carl, the number one topic investors want clarity on is Oracle's financing plan.How does it fund this mega data center buildout with its debt already exceeding hundred billion while also holding on to its investment grade credit rating. It's also got that jumbo bond sale of $18 billion a couple of weeks ago, the biggest of the year. That rattled markets, right.had sent Oracle's 5-year credit defaul ...

Oracle reporting earnings. Sema Modi here with more on what to watch out for this afternoon. Sema >> Sarah and Carl, the number one topic investors want clarity on is Oracle's financing plan.How does it fund this mega data center buildout with its debt already exceeding hundred billion while also holding on to its investment grade credit rating. It's also got that jumbo bond sale of $18 billion a couple of weeks ago, the biggest of the year. That rattled markets, right.had sent Oracle's 5-year credit defaul ...

Core Viewpoint - Oracle is expected to report strong earnings, with a 90% probability of beating Wall Street estimates, driven by its significant role in the AI sector and cloud computing [1][6]. Financial Performance - Current quarter (Nov 2025) consensus estimates are an EPS of $1.64 and revenue of $16.19 billion, reflecting a year-over-year sales growth of 15.17% [4][8]. - Future estimates for the next quarter (Feb 2026) show an expected EPS of $1.72 and revenue of $16.86 billion [4][8]. - Long-term projections for FY2026 and FY2027 include an EPS of $6.82 and revenue of $66.98 billion for FY2026, and an EPS of $8.00 with revenue of $83.57 billion for FY2027 [4][8]. Market Position and Strategy - Oracle has positioned itself as a key infrastructure provider for AI model builders, enhancing its role in the hyperscale cloud market and enterprise data management [6]. - The company's cloud RPO (Remaining Performance Obligation) surged to $455 billion, marking a 359% year-over-year increase, indicating strong demand and validating Oracle's strategic focus on cloud services [6].