Oracle stock sinks as AI costs jump past Wall Street estimates

Laura Bratton

Updated December 12, 2025 3 min read

In this article:

•                                       StockStory Top Pick 
  

  META

  +2.38%

  NVDA

  +2.50%

 ORCL  

 +9.64%  

 

 

 AMZN  

 -0.76%  

 

 

 GOOG  

 +0.40%  

Oracle (ORCL) stock fell nearly 11% Thursday after the tech firm’s quarterly AI costs rose ahead of Wall Street’s expectations and revenue fell short.

Oracle reported capital expenditures of $12 billion for its fiscal second quarter after the bell Wednesday, up from about $4 billion the previous year and the roughly $8 billion projected by analysts tracked by Bloomberg. The AI cloud player also hiked its guidance for full-year capital expenditures to $50 billion from its prior $35 billion estimate.

At the same time, Oracle reported revenue of $16.06 billion for its fiscal second quarter, up 14% from the previous year but lower than the $16.21 billion projected by analysts tracked by Bloomberg.

Oracle’s decline on Thursday marked its biggest daily loss since January.

NYSE - Nasdaq Real Time Price • USD

(ORCL)

Follow    



  View Quote Details   

156.59 +13.77 (+9.64%)

At close: February 9 at 4:01:34 PM EST

Advanced Chart

Read more about today’s market action

Growth in the company’s closely watched AI segment and its backlog did little to quell investor skepticism over its mounting costs.

Oracle Cloud Infrastructure (OCI) saw a 68% climb in revenue to $4.1 billion, roughly in line with analyst estimates.

The company’s AI-fueled RPO, or remaining performance obligations — a measure of future revenue from customer contracts — soared nearly 440% from the prior year and 15% from the first quarter to $523 billion for the three months ended Nov. 30. Oracle principal financial officer Doug Kehring said in a press release that the jump was driven by new commitments from Meta (META), Nvidia (NVDA), and other customers.

Meanwhile, Oracle’s adjusted earnings per share of $2.26 surpassed the $1.64 projected by the Street, marking a jump from EPS of $1.47 in the year-ago period.

The company also raised its longer-term sales outlook, hiking its full-year revenue outlook by $4 billion to $89 billion for its 2027 fiscal year.

Investors had been closely watching the cloud firm’s results for signs about the AI bubble. Oracle shares have plummeted nearly 40% from their September peak — just as the “Magnificent Seven” Big Tech stocks have jumped 10%, according to a Bloomberg index of the equities — as the company’s mounting debt and heavy reliance upon OpenAI (OPAI.PVT) to reach its ambitious revenue targets put investors on edge.

Wall Street analysts remained bullish on the stock following Oracle’s results despite the sell-off.

“While heightened capex and debt expenses, as well as the tight alignment with OpenAI’s success, make this somewhat of a show-me story, we believe that Oracle should be a major beneficiary of the AI platform shift, as it builds critical computing capacity for a growing set of hyperscaler, AI labs, and enterprise customers,” William Blair analyst Sebastien Naji wrote in a note to clients.

Story Continues  

_Read more: _Live coverage of corporate earnings

Oracle stock had peaked this fall as Wall Street applauded the company’s massive RPO of $455 billion in the first quarter, driven by a $300 billion deal with OpenAI.

But the company has featured in the broader fears over an artificial intelligence bubble, as investors grow concerned about the increasing use of debt to fund tech firms’ data center projects, as well as the entanglement of companies participating in the AI boom through multibillion-dollar circular financing arrangements.

The cost of insuring Oracle’s debt against default, as measured by its credit default swap pricing, climbed to its highest level since January 2009 on Thursday, according to Intercontinental Exchange data shared with Yahoo Finance.

Oracle logo. (Reuters/Dado Ruvic/Illustration) · Reuters / Reuters

Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at [email protected].

Click here for the latest technology news that will impact the stock market

Read the latest financial and business news from Yahoo Finance

Terms and Privacy Policy

Privacy Dashboard

More Info