Oracle Corporation (NYSE: ORCL) delivered blockbuster cloud and AI numbers after Wednesday’s closing bell on December 10, 2025 — but the stock still slid more than 6% in after‑hours trading as investors zeroed in on a slight revenue miss and ongoing concerns about debt and the company’s massive AI commitments. [1]
Here’s what happened after the bell, what the latest results really say about Oracle’s AI cloud story, and what traders and long‑term investors should watch before the U.S. market opens on Thursday, December 11, 2025.
Oracle Stock After the Bell on December 10, 2025
- Regular session: Oracle shares finished Wednesday around $223 per share, up modestly on the day. [2]
- After hours: Once the Q2 FY26 report hit, ORCL stock fell more than 6% in post‑market trading, according to multiple live market feeds, as the Street digested a strong earnings beat but a narrow revenue miss. [3]
That after‑hours drop comes on top of a sharp pullback over the past few months. Oracle stock is still up roughly one‑third year‑to‑date, but it trades about 30–36% below its September 2025 record high, reflecting mounting worries about an “AI bubble,” heavy capital spending, and exposure to a handful of mega‑customers such as OpenAI. [4]
In other words: Wednesday night’s reaction is happening against a backdrop where expectations were sky‑high — and sentiment had already turned cautious.
Inside Oracle’s Q2 FY26 Earnings: Cloud and AI Still Roar Ahead
Oracle reported results for its fiscal second quarter 2026, covering the three months ended November 30, 2025. [5]
Headline numbers
- Total revenue:$16.1 billion, up 14% year‑over‑year in U.S. dollars (13% in constant currency). [6]
- Cloud revenue (IaaS + SaaS):$8.0 billion, up 34% year‑over‑year, now representing half of total revenue. [7]
- Cloud Infrastructure (IaaS) revenue: About $4.1 billion, soaring 68% year‑over‑year as Oracle ramps GPU‑heavy AI clusters. [8]
- GAAP EPS:$2.10, up 91% vs. a year ago.
- Non‑GAAP EPS:$2.26, up 54% year‑over‑year. [9]
Most Street models were looking for adjusted EPS around $1.63–$1.64 and revenue near $16.2 billion. That means Oracle delivered a very large earnings beat but a roughly 0.5% revenue miss, according to several consensus trackers. [10]
Backlog and AI demand
The most eye‑catching line item was Oracle’s future revenue pipeline:
- Remaining Performance Obligations (RPO):$523 billion, up a staggering 438% year‑over‑year and 15% sequentially, with about $68 billion of new commitments in the quarter. [11]
- Management highlighted new multi‑year cloud deals with Meta, NVIDIA and other AI leaders, underscoring Oracle’s role as a GPU‑rich AI infrastructure provider. [12]
That RPO figure is the latest step up from the $455 billion backlog reported after Q1 FY26 — itself a number that had stunned the market and helped send Oracle shares up more than 30% in a single session back in September. [13]
Profitability and cash flow
- Non‑GAAP operating income:$6.7 billion, up about 10% year‑over‑year. [14]
- Trailing 12‑month operating cash flow:$22.3 billion, up ~10%. [15]
- Results were boosted by a one‑time $2.7 billion pre‑tax gain on the sale of Oracle’s stake in chip company Ampere, which padded EPS and non‑operating income. [16]
Dividend
Oracle’s board declared a $0.50 per share quarterly dividend, payable January 23, 2026 to shareholders of record as of January 9, 2026, continuing the company’s pattern of returning cash to investors even as it spends heavily on AI capacity. [17]
Taken on their own, these numbers look strong: double‑digit revenue growth, very fast‑growing cloud and AI infrastructure, and an enormous contracted backlog that stretches years into the future.
So why did the stock sell off?
Why the Stock Is Selling Off: Revenue, Debt and Concentration Risk
The core tension in the after‑hours reaction is simple:
The AI story is getting bigger — but so are the bill and the risks.
1. Slight revenue miss vs very high expectations
Analysts were already pencilling in ~15% revenue growth and a multi‑year AI super‑cycle. Oracle came in just shy of those top‑line expectations, with revenue about 0.5% below the Street consensus, even as EPS trounced forecasts. [18]
That combination — “EPS beat, revenue miss” — can be unsettling for growth investors, because it raises questions about whether:
- The company is leaning more on cost control and one‑offs (like the Ampere gain), and
- Top‑line growth is tracking slightly below the “hypergrowth AI narrative” investors were starting to price in.
Early write‑ups from outlets like Yahoo Finance and other market desks framed the quarter exactly this way, noting that the revenue shortfall was enough to send shares down more than 6% after the bell despite the headline beat. [19]
2. Debt‑for‑growth and rising leverage
In the run‑up to this print, several research shops called out what one IG analyst described as the “debt elephant in the room.” [20]
Key concerns:
- Oracle’s free cash flow turned negative in late FY25 as capex exploded to build AI data centers. [21]
- The company has been adding tens of billions of dollars in new borrowing, on top of roughly $105 billion of existing debt as of late summer 2025. [22]
- Management has signaled FY26 capital expenditures of around $35 billion, roughly 65% higher than prior years, largely to fund GPU clusters and data‑center buildouts. [23]
- Rating agencies Moody’s and S&P have shifted to negative outlooks, warning that leverage could exceed 4× net debt‑to‑EBITDA by 2027–2028 and hinting at a possible downgrade toward non‑investment‑grade if debt growth outpaces earnings. [24]
Despite Wednesday’s big backlog and EPS beat, those structural concerns didn’t go away — and some investors appear to be using strength in the results to continue de‑risking.
3. The gigantic OpenAI “Stargate” deal cuts both ways
Oracle’s AI infrastructure strategy is heavily tied to OpenAI and the much‑discussed “Stargate” super‑cluster project, where Oracle is reported to have landed a five‑year, roughly $300 billion cloud contract that could represent close to one‑third of Oracle’s revenue by 2028. [25]
Analysts and commentators have flagged three key risks:
- Concentration risk: Can one customer safely account for such a large share of future revenue?
- Counterparty risk: Will OpenAI reliably generate ~$60 billion per year in spending capacity to fully utilize that contract? [26]
- Regulatory risk: Legal scholars have already raised antitrust questions around a small circle of AI heavyweights (OpenAI, Oracle, SoftBank, MGX and others) teaming up on massive shared infrastructure. [27]
Nothing in Wednesday’s report directly resolved these worries, so the market is still trying to recalibrate how much of the $523 billion backlog should be valued as near‑certain, high‑margin revenue — and how much should be discounted for execution, funding and regulatory risk.
How Wall Street and Derivatives Traders Are Reading ORCL
Analyst ratings and targets
Heading into the Q2 release, Oracle enjoyed a broadly positive but not euphoric Street stance:
- Consensus rating: Moderate Buy based on 25 Buy, 11 Hold and 1 Sell ratings.
- Average 12‑month price target: About $348, implying roughly 57% upside from pre‑earnings levels near $220. [28]
Recent calls include:
- TD Cowen (Buy, $400 PT): Views the sell‑off as overdone and believes reaffirmed OCI growth could ease concerns about capacity and AI demand, noting ORCL trades at what they consider “trough” valuation multiples. [29]
- RBC Capital (Hold, $310 PT): More cautious, highlighting customer concentration risk, potential margin pressure, and incremental leverage as reasons to stay on the sidelines. [30]
- Bernstein (Buy, $364 PT): Reiterated its bullish stance on December 8, praising Oracle’s expanding AI footprint and new European cloud region in Turin, Italy, and arguing that management clarity on spending could help rebuild confidence. [31]
Even automated frameworks are split: TipRanks’ AI “Spark” analyst assigns Oracle a Neutral score, citing robust cloud and AI growth but warning that high leverage, negative free cash flow, and valuation metrics warrant caution. [32]
Options market: big move priced in
Before the report, options traders were braced for fireworks:
- One options analysis pegged the implied move around 9.2%, or about $20 per share, based on near‑term straddles. [33]
- TipRanks’ internal options tool showed an expected move closer to 10.6% in either direction. [34]
With the stock down just over 6% in initial after‑hours trading, Oracle has so far moved less than what the options market was pricing in, leaving room for additional volatility into Thursday’s open as new analyst notes and earnings‑call soundbites hit the tape. [35]
Macro Backdrop: Fed Rate Cut Adds Another Layer
Oracle’s earnings landed on a busy macro day:
- The Federal Reserve cut its benchmark interest rate by 25 basis points in its final meeting of 2025 — the third cut this year. [36]
- U.S. stocks rallied, with the Dow up about 1.1% and the S&P 500 finishing just shy of a record high, while the Nasdaq also advanced. [37]
- Earlier in the day, 10‑year Treasury yields hovered near 4.20%, reflecting a still‑elevated but easing rate environment. [38]
For growth names like Oracle, rate cuts are generally supportive: lower discount rates increase the present value of long‑dated AI and cloud cash flows. But they can also fuel renewed debate about tech valuations and speculative excess — including the very “AI bubble” worries that some analysts have been raising in connection with ORCL. [39]
What to Watch Before the Market Opens on December 11, 2025
When trading resumes on Thursday, December 11, 2025, here are the key Oracle‑related themes to monitor:
- Pre‑market price action and liquidity
- Does the >6% after‑hours drop deepen, stabilize, or reverse as institutional investors digest the results and the earnings call replay?
- Watch pre‑market volume and any large block trades that could signal bigger positioning shifts. [40]
- Fresh analyst revisions
- Expect a wave of post‑earnings research notes Thursday morning. Look for:
- Changes in price targets (up or down).
- Any moves from Buy → Hold or Hold → Buy.
- Explicit comments on debt trajectory, OpenAI exposure, and how much of the backlog analysts treat as “core” vs “high‑risk”. [41]
- Expect a wave of post‑earnings research notes Thursday morning. Look for:
- Earnings‑call color on AI demand vs. capacity constraints
- On the call, Oracle executives are likely to be pressed on:
- Read‑through to the broader AI and hyperscaler complex Oracle’s print is a macro AI sentiment event, not just a single‑stock story. Traders will watch how:
- GPU suppliers and AI beneficiaries like NVIDIA react. [44]
- Hyperscale cloud rivals Amazon, Microsoft and Alphabet trade, given overlapping AI and enterprise cloud narratives.
- High‑beta AI software names respond to any shifts in the “AI infrastructure demand is insatiable” story line.
- Rate‑sensitive rotation With the Fed having just cut rates, some investors may rotate back into long‑duration tech and cloud names if they interpret Powell’s tone as supportive. Others may use the post‑earnings volatility in ORCL to shift into AI plays with less leverage or customer concentration. [45]
- Key technical levels
- Several recent analyses pointed to the $200 zone as major support, with Oracle previously bouncing off that level ahead of earnings. [46]
- If Thursday’s session pushes ORCL back toward or below $200, it could trigger stop‑loss selling — but it could also attract “buy the dip” interest from investors who still believe in the AI cloud story.
Longer‑Term Takeaways for Oracle Investors
Stepping back from the minute‑by‑minute moves, three big themes emerge from the December 10 earnings and the surrounding analysis:
- The AI cloud engine is very real
- Cloud and OCI growth of 34–68%, plus a $523 billion backlog, indicate that Oracle is firmly embedded in the current AI infrastructure cycle, with all top five AI models reportedly running on Oracle Cloud. [47]
- But the balance sheet is carrying a heavy load
- Rapid build‑out of AI data centers has pushed free cash flow negative, with tens of billions in new debt and the risk of a credit rating downgrade if leverage keeps climbing. [48]
- The stock is in a classic “high opportunity, high anxiety” zone
- Over a five‑year horizon, Oracle has delivered a roughly 300% total return, dramatically outpacing many major indices as it pivoted from legacy software to cloud and AI. [49]
- But after a 40%‑ish drawdown from peak, opinion is split between those who see a rare entry point into a future AI infrastructure leader, and those who worry that too much future growth is already “pre‑sold,” funded with too much debt and concentrated in too few customers. [50]
For traders, ORCL around this earnings event is essentially a high‑volatility macro/AI sentiment trade. For longer‑term investors, the decision boils down to whether you’re comfortable with:
- Oracle’s debt‑for‑growth strategy;
- The durability of AI demand over the next decade; and
- The company’s ability to manage concentration and regulatory risks while converting a massive backlog into sustainable free cash flow.
As always, this article is for informational purposes only and is not investment advice. Anyone considering an investment in Oracle — or any stock — should evaluate their own risk tolerance and, if needed, consult a qualified financial adviser.
Key Oracle Q2 FY26 Numbers at a Glance
- Quarter reported: Fiscal Q2 2026 (three months ended November 30, 2025) [51]
- Revenue: $16.1B, +14% YoY (13% in constant currency) [52]
- Cloud revenue (IaaS + SaaS): $8.0B, +34% YoY
- Cloud Infrastructure (OCI) revenue: $4.1B, +68% YoY [53]
- GAAP EPS: $2.10, +91% YoY
- Non‑GAAP EPS: $2.26, +54% YoY; Street was around $1.64 [54]
- RPO (backlog): $523B, +438% YoY, +15% QoQ (up $68B in the quarter) [55]
- TTM operating cash flow: $22.3B, +10% [56]
- Dividend: $0.50 per share, payable January 23, 2026
- Stock: ~$223 at close on Dec 10, 2025; down >6% in after‑hours trading post‑earnings [57]
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