Oracle Stock On Track To Pull Back To 1-Month Low Following Q2 Miss, Lackluster Guidance: Retail Sentiment Plummets

 

Oracle Corp. ($ORCL) shares fell sharply in Tuesday’s premarket session following the company’s double miss for the fiscal year 2025 second quarter and the lackluster guidance.

Austin, Texas-based Oracle reported second-quarter non-GAAP earnings per share (EPS) of $1.47 compared to the year ago’s $1.34 and the guidance of $1.45-$1.49. The bottom-line result, however, trailed the consensus estimate of $1.48 per share. 

Revenue increased 9% year-over-year (YoY) to $14.1 billion, slightly shy of the $14.12 billion consensus estimate. The company had guided to 8-10% revenue growth for the quarter.

Cloud services and license support revenue climbed 12% to $10.8 billion, with cloud revenue rising a steeper 24% to $5.9 billion. The company had modeled 24%-26% cloud revenue growth for the quarter.

Short-term deferred revenue was $9.4 billion, and total remaining performance obligations climbed 49% to $97 billion.

Oracle CFO Safra Katz said, “Record-level AI demand drove Oracle Cloud Infrastructure revenue up 52% in Q2, a much higher growth rate than any of our hyper-scale cloud infrastructure competitors.”

“Growth in the AI segment of our Infrastructure business was extraordinary—GPU consumption was up 336% in the quarter—and we delivered the world's largest and fastest AI SuperComputer scaling up to 65,000 NVIDIA H200 GPUs.”

The board approved a quarterly cash dividend of $0.40 per share to be paid on Jan. 23, 2025 to stockholders of record as of the close of the business on Jan. 9, 2025.

Looking ahead, Oracle guided total third-quarter revenue growth to 7-9%, with cloud revenue growth of 23%-25%. Analysts, on average, expect 10% topline growth for the quarter.

The non-GAAP EPS is estimated at $1.50-$1.54 in constant currency compared to the $1.56 per share consensus estimate.

For the fiscal year 2025, Oracle targets over $25 billion cloud revenue.

ORCL sentiment and message volume December 10, 2024, premarket as of 6:17 am ET | Source: Stocktwits

On Stocktwits retail sentiment toward Oracle stock nose-dived from ‘extremely bullish’ a day ago to ‘bearish’ (36/100), although message volume remained ‘extremely high.’

A Stocktwits user lamented the unattractive valuation of the stock. 

Another saw a pullback toward the $150 on the second-quarter disappointment.

In premarket trading, as of 5:50 a.m. ET, Oracle shares slumped 8.40% to $174.46, the lowest since Nov. 5. The stock has, however, risen nearly 83% this year.

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