Why Is Oracle Stock Down?

Oracle Corporation (NYSE:ORCL) shares plummeted over 11% in premarket trading on December 11, 2025, following the company’s fiscal second-quarter 2026 earnings report released after market close on December 10. The stock fell to $198.20 at 5:04 AM EST, down $25.08 from its previous close of $223.01.

The sharp decline came despite Oracle beating earnings per share estimates, as investors expressed concern over the company’s massive capital expenditure increases and cloud revenue that fell just short of Wall Street expectations. The disappointing results have reignited questions about whether Oracle’s debt-fueled data center buildout will deliver returns as quickly as promised.

Revenue Disappointment Overshadows EPS Beat Amid Surging Capex

Oracle reported fiscal second-quarter cloud sales of $7.98 billion, up 34% year-over-year but falling short of analyst estimates. The company’s closely watched infrastructure business generated $4.08 billion in revenue, representing 68% growth but still missing expectations. Total revenue reached $16.1 billion, up 14% from the prior year period, while non-GAAP earnings per share of $2.26 exceeded the $1.64 estimate.

However, the revenue shortfall overshadowed the earnings beat, with investors focusing on whether Oracle can convert its aggressive spending into proportional revenue growth.

The company’s Remaining Performance Obligations (RPO) surged 438% to $523 billion, slightly above the $519 billion analyst consensus, driven by major commitments from Meta, NVIDIA, and OpenAI. Capital expenditures reached approximately $12 billion in the quarter, up from $8.5 billion in the previous period and significantly exceeding the $8.25 billion analysts anticipated.

Oracle now expects full-year capital expenditures to reach $50 billion, a $15 billion increase from its September forecast, raising concerns about the company’s aggressive debt-funded expansion strategy.

Investors Wary as AI Buildout Outpaces Cloud Revenue Growth

Analysts and investors have expressed mounting skepticism about Oracle’s ability to quickly monetize its massive data center investments. The company has taken on significant debt and committed to leasing multiple data center sites to support AI workloads, particularly for its partnership with OpenAI.

Wall Street wants to see Oracle translate higher infrastructure spending into revenue at the pace management has promised, but the Q2 results suggest this conversion may take longer than anticipated.

The stock has now lost approximately one-third of its value since reaching an all-time high on September 10, 2025, when investor enthusiasm about Oracle’s cloud business peaked. Trading at $223.01 before the earnings release, the shares hit a low of $197.25 in extended trading. Concerns have intensified around OpenAI’s ability to fulfill its $300 billion compute deal with Oracle, as well as broader questions about whether AI infrastructure spending will generate proportional returns.

Analyst Jacob Bourne from Emarketer noted that Oracle faces “mounting scrutiny over a debt-fueled data center build-out and concentration risk amid questions over the outcome of AI spending uncertainty.”

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