Spanish
New York.- Oracle's tech stocks plunged this Wednesday in after-hours trading after announcing quarterly results below Wall Street's expectations, against a backdrop of doubts about spending on cloud services and the escalating investments to sustain its strategy in artificial intelligence (AI).
The Austin, Texas-based company reported revenue of $16.06 billion in the first fiscal quarter of 2026, a year-on-year growth of 14%, but insufficient compared to the consensus of analysts, who expected nearly $16.21 billion.
Furthermore, it reported a net attributable profit of $2.9 billion, representing a year-on-year decrease of approximately 7% compared to the same quarter of the previous year, due to increased operating expenses and heavy investments in cloud infrastructure and AI-linked services, it reported in a statement.
Despite the adjusted earnings per share being $2.26, above market expectations, the investors' reaction was negative and the shares fell more than 7% in after-hours trading.
However, specialized media indicate that future service contracts —known as “remaining performance obligations” (RPO)— rose to $523 billion, suggesting future demand, especially for its cloud infrastructure.Exposed to OpenAI
Oracle has a large exposure to OpenAI, the developer of ChatGPT, as it provides part of its cloud infrastructure, and has become a key provider for the operation of large-scale artificial intelligence models.
This implies that a significant portion of Oracle's revenue is tied to the success and demand of OpenAI, which can be very profitable but also generates risks if the growth of AI slows down. The "cloud infrastructure" segment, which includes computing, storage, and managed cloud services, grew strongly — an increase of nearly 68% year-on-year, according to estimates —, demonstrating that Oracle continues to bet heavily on migrating to the cloud and on providing AI-related services. However, that bet was not enough to offset the fall in its traditional "legacy" software business, whose turnover decreased by around 1% year-on-year. Investing in massive data center infrastructures implies a significant risk for many analysts: maintaining high levels of capital expenditure in an environment where the actual monetization of those future commitments is still uncertain, experts cited by the CNBC network point out. For now, investors seem to prefer prudence as the stock market reaction reflects a fear that the whirlwind of investments in AI and the cloud may not translate into sufficiently solid immediate results.
