Oracle shares plunge 11% despite earnings beat—here's why
Oracle's stock took an 11% dive after hours, even though the company beat profit expectations for Q2.
The catch? Revenue came in a bit short at $16.06 billion (just shy of Wall Street's $16.21 billion target), and a chunk of those profits was from a one-time gain—so the financial picture isn't as strong as it first looked.
Why does this matter?
If you're following tech or thinking about investing, Oracle's story is a reminder that big bets on AI and cloud don't guarantee smooth sailing.
Despite huge growth in its cloud business (up 68%), software sales slipped and future revenue timing is murky, making investors nervous.
What's behind the drop?
Oracle just raised $18 billion in bonds to fund more AI infrastructure and faces concerns over its dependence on OpenAI's $300 billion contract, with funding timelines remaining unclear.
The company also upped its spending plans to $50 billion for the year.
With all this uncertainty around future revenue and heavy investment, shares could fall nearly 50% from their September high if after-hours losses hold in regular trading.