Wall Street Punishes Oracle As Ellison’s $130B Promise Meets a Brutal Reality…

Larry Ellison might have a big swingin’ $130 billion backlog, but Wall Street only cares about one thing: what have you done for me lately? And based on Oracle’s latest earnings report, the answer is not enough.

(Source: Giphy) 

In short, the enterprise software giant missed on earnings, whiffed on revenue, and then—because apparently that wasn’t painful enough—served up weak guidance for the upcoming quarter. The stock, unsurprisingly, tanked in after-hours trading as investors realized that Oracle’s AI-fueled cloud hype train might not be moving as fast as expected. 

For more context, here are the receipts: Oracle reported $1.47 in adjusted EPS, missing the $1.49 analysts were expecting. Revenue came in at $14.13 billion, falling short of the anticipated $14.39 billion. Sure, that’s 6% growth year over year, but this is supposed to be an AI driven revolution. Perhaps you’ve heard? Investors aren’t here for mid-single-digit gains—they want hockey stick growth or nothing.

(Source: CNBC) 

The real dagger though, is that Oracle’s cloud revenue grew 23% to $6.2 billion, but that’s still not enough to keep up with Microsoft and Amazon, who continue to cash checks and snap necks in the cloud computing space.Oracle’s cloud infrastructure unit—the part that’s supposed to be the real AI play—grew 49% to $2.7 billion, which sounds impressive until you realize that Microsoft and Amazon each generate more than that in a week from their cloud businesses. 

On the other hand, Ellison put on his Greatest Showman hat and promised that Oracle is on track to double its data center capacity this year to meet record demand. Of course, this all stems from Oracle’s partnerships like Stargate—the government-backed AI infrastructure project that includes OpenAI and SoftBank. But right now, that's old news. The new news is that investors are butthurt, and the hype isn’t strong enough to kill the sting. 

(Source: Reuters) 

Why? Because again, while AI demand is booming, Oracles isn’t the only honest woman in town. Microsoft, Amazon, and Google are all pouring billions into AI infrastructure, and Oracle is still playing second fiddle. But, but, but… “oRaCLe ExPEcTs 8-10% rEveNUe gRoWtH”---cool story, but analysts were expecting 11%. Even worse, Oracle guided for $1.61 to $1.65 EPS, while Wall Street was looking for $1.79. Bigly bad. 

The only good news of the report is that retirees got horned up after Oracle raised its dividend by 25%. Which again, is great news if you’re a boomer collecting fat yields, but a red flag if you’re looking for growth. Companies that are killing it don’t need to bribe shareholders with higher dividends—they reinvest in the business. To make matters worse, Oracle’s on-premises licenses business dropped 10% YoY, a reminder that legacy software isn’t the freak in the sheets it used to be. 

RIP to the GOAT (Source: Giphy) 

In the end, Oracle has spent years trying to convince the market that it’s more than just an old-school enterprise software company in a world run by hyperscalers. And to their credit, they’ve made real progress. But as of today, Wall Street isn’t here for it—especially not without proof that Oracle can keep up with the big dogs. 

For now, the stock is down 11% this year, and if Oracle doesn’t start delivering real, undeniable growth, this slide isn’t stopping anytime soon. Add it to the list. In the meantime, place your bets accordingly, friends. As always, stay safe and stay frosty! Until next time… 

P.S. Word on the street is that as early as yesterday, a high-ranking Managing Director—one with potential Warren Buffett ties—just dumped nearly $10 million worth of shares on a certain aerospace company. What’s behind the sudden cash-out? Panic? A strategic move? Something way juicier? Stocks.News premium members will get the full breakdown later today. Don’t get left in the dark—click here to join the cool kids who actually know what’s going on.

Stocks.News holds positions in Microsoft, Amazon, and Google as mentioned in the article.