Oracle's stock price at Dec. 12 was above 12%, possibly because the company's fiscal second-quarter earnings report on the evening of the 11th missed expectations.
The company reported adjusted earnings per share of 1$34, slightly more than LSEG (formerly Refinitiv) 1$32 expected. Revenue for the fiscal second quarter was 129$400 million, below LSEG's forecast of $130$500 million.
In particular, Wall Street analysts noted in a note to investors that Oracle's cloud computing revenue fell short of expectations.
"It's disappointing and hard to say that Oracle's cloud computing OCI business didn't meet growth expectations for the second consecutive quarter and again blamed it on poor infrastructure capacity expansion," UBS analysts wrote in a note for investors.
JPMorgan analysts have expressed concern about whether Oracle is strengthening its Oracle Cloud Infrastructure (OCI) fast enough. "While demand for OCI appears to be ample at the moment, there are questions about Oracle's ability to build a modern data center," it wrote in the report. ”
Deutsche Bank analysts said they can understand Oracle's share price** but remain bullish on the company's prospects and maintain its rating, citing two deals of about $1 billion announced by Oracle co-founder Larry Ellison, strong demand, and "Oracle's commitment to more than 50% growth in the size of OCI in the coming years."
Oracle is also buying chips in large quantities, including GPUs from Nvidia, as well as CPUs from AMD and Ampere. In addition, Oracle has partnered with other tech giants, including Microsoft, to give customers access to Microsoft's cloud service, Azure.