Oracle Beats Earnings Expectations but Slides on $20B Fundraising Plan as AI Spending Surges
Oracle delivered a stronger-than-expected performance in its fiscal fourth quarter, beating Wall Street forecasts on both revenue and earnings while raising its profit outlook for the year. However, the upbeat results were overshadowed by investor concerns after the company revealed plans to raise an additional $20 billion, sending its stock lower in after-hours trading.
For the quarter ended May 31, Oracle posted earnings per share of $2.03 versus the expected $1.96, while revenue came in at $19.18 billion, slightly above analyst estimates. Revenue climbed 21% year-over-year, driven by continued expansion in cloud services. Net income also rose to $4.22 billion, reflecting steady operational growth even as the company invests heavily in its long-term infrastructure strategy.
Despite the earnings beat, Oracle shares dropped sharply in extended trading as investors reacted to its aggressive capital-raising plan. The company announced it intends to raise $40 billion in total through debt and equity financing, including a new $20 billion share sale. Concerns are growing that Oracle’s massive spending on AI infrastructure could strain cash flow and dilute shareholder value in the short term.
Growth in Oracle’s cloud business remained a key bright spot, with cloud revenue jumping 47% and cloud infrastructure soaring 93% year-over-year. The company also reported a surge in remaining performance obligations to $638 billion, reflecting strong demand for large-scale AI contracts, including partnerships tied to GPU supply and customers such as OpenAI. This signals deepening involvement in the global AI arms race.
Looking ahead, Oracle maintained its long-term revenue guidance while raising earnings expectations, even as capital expenditures are set to remain elevated. The company continues to expand data center capacity and strengthen its AI infrastructure footprint, recently hiring a new CFO to manage its financial strategy. While the growth outlook remains strong, investor sentiment is clearly divided between future potential and near-term financial pressure.
source: cnbc