Last updated: Thursday, December 11, 2025, ~5:00 a.m. Eastern Time
Oracle stock today: double‑digit premarket slide after earnings
Oracle Corporation (NYSE: ORCL) is under heavy pressure in premarket trading on Thursday after its latest earnings and AI spending update unnerved investors.
- Wednesday close (Dec 10): about $223.01 per share. [1]
- After‑hours low: the stock dropped to roughly $197.26, an 11–12% plunge following the Q2 FY26 report. [2]
- Premarket indication (around 5:00 a.m. ET): multiple outlets report Oracle shares down roughly 11–12%, trading just under the $200 mark, with quotes around $196–$197. [3]
Reuters and other data providers note that Oracle’s premarket drop is spilling over into broader sentiment: AI and cloud names such as Nvidia, Alphabet and major index futures are also weaker as traders reassess the profitability of large‑scale AI infrastructure spending. [4]
In Europe, Frankfurt‑listed Oracle shares are down by a similar margin, underscoring that the reaction is global rather than just a U.S. outlier. [5]
Q2 FY26 earnings recap: EPS beats big, revenue and guidance disappoint
Oracle reported results for its fiscal second quarter of 2026 (quarter ended November 30, 2025) after the U.S. close on Wednesday.
Headline numbers
According to Oracle’s official release and earnings call recap: [6]
- Total revenue:$16.1 billion, up 14% year over year (13% in constant currency).
- Cloud revenue (IaaS + SaaS):$8.0 billion, up 34%.
- Cloud Infrastructure (OCI / IaaS):$4.1 billion, up 68%.
- Cloud Applications (SaaS):$3.9 billion, up 11%.
- Fusion Cloud ERP revenue:$1.1 billion, up 18%.
- NetSuite Cloud ERP revenue:$1.0 billion, up 13%.
- Software revenue (outside cloud):$5.9 billion, down about 3%.
On profitability:
- GAAP EPS:$2.10, up 91% year over year.
- Non‑GAAP EPS:$2.26, up 54%, and far above Wall Street’s consensus of about $1.64. [7]
- EPS was boosted by a $2.7 billion pre‑tax gain from selling Oracle’s stake in Ampere, its in‑house Arm server‑chip venture. [8]
So on paper, this is a classic “EPS beat, revenue miss” quarter: Oracle topped earnings expectations but fell short on revenue, with LSEG data showing Q2 sales of $16.06 billion vs. $16.21 billion expected. [9]
Massive AI backlog vs. massive AI bill: Oracle’s $523B RPO and $50B capex
The numbers that really grabbed headlines were not just revenue and EPS, but backlog and spending.
Record Remaining Performance Obligations (RPO)
Oracle’s Remaining Performance Obligations (RPO) — essentially contracted future revenue it has yet to deliver — exploded:
- RPO:$523 billion, up 438% year over year. [10]
- Sequential increase: RPO grew by roughly $68 billion in just one quarter, largely driven by cloud and AI infrastructure commitments from hyperscale clients including Meta and Nvidia, and previously publicized mega‑deals with OpenAI. [11]
On the earnings call, management framed this as evidence of enormous AI demand and long‑term visibility — “cloud IOUs” that Oracle expects to monetize over the coming years. [12]
Fiscal 2026 capex jumps by $15B
But that backlog comes with a huge price tag.
Oracle now expects fiscal 2026 capital expenditures (capex) to be about $15 billion higher than previously forecast after Q1, lifting total spending to around $50 billion for the year vs. an earlier estimate near $35 billion. [13]
Management tied the higher capex directly to the backlog expansion — the company must build more AI‑ready, multicloud data center capacity to honor contracts. However, this scale of spending, and the timing of the payback, is what spooked investors overnight.
Why the market is punishing Oracle: revenue miss, financing worries, and AI bubble fears
Despite strong growth in cloud and a powerful RPO story, the market is focusing on three main issues this morning.
1. Revenue/guidance vs. sky‑high expectations
Reuters’ “Street View” notes that Oracle projected revenue and profit below consensus expectations in its outlook, even as OCI continues to grow briskly. [14]
- Q2 revenue slightly missed expectations.
- The outlook implies slower‑than‑hoped near‑term growth, especially relative to the market’s very aggressive AI narrative.
In other words, for a stock that had become a high‑beta AI infrastructure play, “solid but not spectacular” is not good enough.
2. Debt and free‑cash‑flow strain
Several commentaries published today zoom in on Oracle’s balance sheet and cash generation:
- Oracle’s net debt is around the high‑$80 billion range, with total debt over $100 billion, according to data cited by Citizens and other analysts. [15]
- FXLeaders highlights that negative free cash flow has swollen to more than $13 billion, as the company front‑loads AI and cloud infrastructure spending. [16]
Investors worry about how Oracle will finance a $50 billion capex plan while juggling debt, dividends and potential buybacks — especially if revenue ramps more slowly than hoped.
On the earnings call, Oracle’s principal financial officer emphasized that the company has multiple funding channels, including public bond markets, banks, private debt and even arrangements where customers or suppliers provide the chips, aligning cash outflows and inflows. Management reiterated a commitment to maintain an investment‑grade credit rating. [17]
Still, the sheer scale of spending is enough for some firms — Morgan Stanley among them — to have previously argued for shorting Oracle, citing the AI build‑out as a high‑risk bet. [18]
3. “AI bubble” narrative gets new fuel
The Guardian’s markets coverage and several Reuters pieces frame Oracle’s results as another data point in the debate over a possible AI investment bubble:
- Oracle’s RPO surged more than 400% year over year, but much of that is tied to a small group of big‑tech and AI firms, including OpenAI, Meta and Amazon. [19]
- Analysts quoted in UK and European coverage warn that the AI ecosystem is becoming “circular,” with firms financing each other’s massive data center projects while profits lag behind. [20]
Oracle’s results triggered a broad sell‑off in AI‑linked equities overnight, with Japan’s SoftBank, U.S. AI chipmakers and other cloud names all sliding as traders questioned whether AI infrastructure spending is running ahead of sustainable returns. [21]
The bull case: cloud growth, chip neutrality and multicloud momentum
Even as the stock sells off, bullish analysts and Oracle itself point to a powerful long‑term story.
Record AI and cloud growth
- Cloud infrastructure (OCI) revenue is growing 60–70%, far faster than the legacy software business. [22]
- Oracle says it now has over 211 live and planned cloud regions worldwide and is more than halfway through building 72 “multicloud” datacenters embedded inside AWS, Google Cloud and Microsoft Azure. [23]
- Multicloud database services — letting customers run Oracle databases across different clouds — are claimed to be Oracle’s fastest‑growing business, with triple‑digit growth year over year. [24]
If Oracle can successfully ramp capacity and execute on these contracts, the $523 billion RPO implies a long runway of revenue.
“Chip‑neutral” strategy after Ampere sale
Oracle also confirmed it has sold its stake in Arm server‑chip startup Ampere, taking that $2.7 billion gain and exiting its ambition to design its own chips. Management now touts a “chip‑neutral” policy, working with all major CPU and GPU providers.
- Customers will be able to bring their own chips into Oracle data centers.
- Oracle focuses on running and orchestrating AI workloads, rather than owning the silicon roadmap. [25]
Citizens’ analyst — who this morning reiterated a “Market Outperform” rating and a $342 price target — highlights this chip‑neutral approach and Oracle’s differentiated database and AI software stack as key competitive advantages. The firm even projects Oracle’s revenue growth could accelerate from about 17% in FY26 to nearly 47% in FY28 as AI capacity is monetized. [26]
AI embedded across Oracle’s stack
Oracle’s leadership argues that the company is uniquely positioned to embed AI in all three layers of its offering: data center software, autonomous database/analytics, and enterprise applications.
Examples cited include:
- AI‑driven automation of complex financial workflows, such as loan origination and risk scoring.
- AI tools to assist doctors and health systems with diagnostics and reimbursement management.
- Hosting of top‑tier AI models in Oracle Cloud, using its high‑bandwidth network and database integration. [27]
From this perspective, the current selloff is less about demand and more about timing, financing, and execution risk.
How Wall Street is reacting: price targets cut, but most ratings stay positive
Analysts have been busy overnight, and December 11 has already brought a wave of fresh research.
New and reiterated calls this morning
- Citizens: Reiterated “Market Outperform” and a $342 price target, citing Oracle’s chip‑neutral strategy, massive backlog and expectation of accelerating growth through FY28, while acknowledging higher capex and debt. [28]
- Jefferies: Recently maintained a “buy” rating despite financing worries, noting the backlog slightly exceeded expectations even as concerns about AI‑related debt linger. [29]
- Morningstar: Published a fresh note saying it is lowering its fair value estimate for Oracle but still sees upside, anchored by an expanded multicloud footprint and stronger channel programs. [30]
Recent target cuts (overnight and early European hours)
European market coverage, citing Reuters, lists several notable target reductions following the earnings release: [31]
- Barclays: Cut price target to $310 (from $330), rating “Overweight”, stressing long‑term OCI and RPO strength but flagging uncertainty around funding models.
- Bank of America: Reduced PT to $300 (from $368), retaining a “Buy” rating but warning about a mismatch between heavy AI capex and slower revenue realization.
- J.P. Morgan: Trimmed PT to $230 (from $270), keeping “Neutral”, leaning on Oracle’s multicloud and OCI momentum but highlighting spending and financing risks.
- Baird: Rates Oracle “Outperform” with a $300 target, pointing to strong margins and competitive position despite OpenAI exposure and funding questions. [32]
Earlier in the week, RBC reaffirmed a $310 price target ahead of earnings, and other firms such as Citigroup and Deutsche Bank remain largely constructive. [33]
Consensus: still a “buy” with targets in the low‑ to mid‑$300s
Across major consensus trackers:
- MarketBeat: Average 12‑month target around $320–$325, implying substantial upside from sub‑$200 levels. [34]
- TipRanks: Average target near $346, with the stock rated a “Moderate Buy” (roughly two‑thirds buys, the rest holds, and very few sells). [35]
- ValueInvesting.io and Zacks: Cluster around $340–$345 as average targets, with a wide range from about $175 to $420 and an overall “Buy” consensus. [36]
Even after today’s sharp drop, most analysts’ target prices remain far above the sub‑$200 premarket quote, suggesting Wall Street, on balance, still believes in the long‑term AI and cloud thesis — albeit with higher risk and volatility than before.
Technical view: key levels traders are watching today
Technical‑oriented commentary this morning paints a rough near‑term picture. [37]
- Oracle has already fallen around 20–25% from its recent peak near $250, hurt first by November’s decline and now by the post‑earnings reaction.
- The stock has been struggling to stay above its 100‑day moving average and is now sliding toward the 200‑day moving average, a level it previously bounced from near the $185 zone.
- Analysts at FXLeaders describe deteriorating momentum, with ORCL failing to reclaim key resistance and now threatening a deeper pullback if $185–$190 doesn’t hold.
From a trading perspective (not a recommendation), some of the levels likely on watch:
- $200: psychological round number and the area the stock is hovering around premarket.
- $185: approximate November low and rough 200‑day moving‑average neighborhood cited in several analyses. [38]
- $230–$250: recent resistance band where the previous rally stalled before the November and December sell‑offs. [39]
Short‑term traders may treat the early drop as either a breakdown to be sold or a “gap‑down” buying opportunity, depending on how the stock trades around the open and whether volume confirms capitulation or continued distribution.
Oracle stock forecast: what today’s move could mean for 2026 and beyond
Putting it all together, what does this premarket collapse imply for Oracle’s medium‑term story?
Bullish scenario
In the optimistic version of events:
- Oracle successfully builds out AI and multicloud capacity over FY26–FY28.
- The $523 billion backlog converts into rising revenue, and cloud margins scale as data centers mature.
- Debt remains manageable thanks to steady cash flows and diversified financing sources.
- AI becomes deeply embedded in Oracle’s applications and database products, lifting pricing power and lock‑in.
If this plays out, the average analyst targets in the low‑ to mid‑$300s could prove conservative, particularly if AI demand accelerates or Oracle wins more high‑profile customers beyond the current set. [40]
Bearish scenario
In the darker scenario:
- AI spending across the industry normalizes faster than expected.
- Some large contracts fail to fully materialize, are renegotiated, or ramp more slowly, leaving Oracle with overbuilt capacity.
- Debt and negative free cash flow force difficult choices on dividends, buybacks, or growth investments. [41]
- The narrative of an “AI bubble” bursting in infrastructure‑heavy names gains traction, pressuring valuation multiples across the space.
In that world, today’s drop could be a step in a longer de‑rating process, with more downside risk toward prior support levels around $185 or even lower if macro conditions deteriorate.
Most likely outcome?
Many nuanced takes published today — including by Morningstar, Reuters’ “Street View,” and independent analysts — land somewhere in the middle: [42]
- Oracle clearly has real, not hypothetical, AI demand, as evidenced by its backlog and rapid OCI growth.
- But the timing and financing of that demand are riskier than the market was pricing in at $250+, especially given the capital intensity and heavy leverage.
- The stock’s reaction reflects worry more than panic — a repricing of risk, not a verdict that the business model is broken.
What investors should watch next
For anyone following ORCL today and in coming weeks, key catalysts include:
- Cash flow trends: Does Oracle quickly move back toward stronger free cash generation, or do negative FCF and rising debt persist? [43]
- Capex cadence: Any updated commentary on whether the $50 billion FY26 capex forecast could be moderated if demand slows or financing becomes more expensive. [44]
- Customer concentration: New disclosures about the mix of RPO across customers like OpenAI, Meta, Amazon, and others — particularly if reliance on a few names becomes a concern. [45]
- AI and multicloud wins: Announcements of additional large AI, database or multicloud deals that validate Oracle’s chip‑neutral, cloud‑neutral strategy. [46]
- Rating‑agency or macro shifts: Any change in credit‑rating outlook, or a macro shock that makes heavy leverage less palatable to investors.
Bottom line: Oracle is now a high‑stakes AI stress test
By early Thursday, December 11, 2025, Oracle stock is on track for one of its biggest single‑day hits in years, with a premarket drop of roughly 11–12% leaving shares just under $200.
The company delivered:
- A strong EPS beat,
- Robust cloud and AI growth, and
- A jaw‑dropping $523 billion backlog —
but it also revealed a $50 billion capex bill, rising debt, and guidance that fell short of AI‑fueled hopes.
For long‑term investors, Oracle has effectively become a test case for the economics of hyperscale AI infrastructure: can enormous upfront spending on data centers and GPUs translate into durable revenue, margins and cash flow, or will AI build‑outs prove more fragile than today’s forecasts assume?
In the short term, volatility around ORCL is likely to stay elevated. In the long term, whether today’s premarket plunge looks like a buy‑the‑dip opportunity or the start of a deeper rerating will depend on how quickly Oracle can turn its cloud IOUs into cold, hard cash.
Not investment advice: This article is for informational and news purposes only and does not constitute financial, investment or trading advice. Always do your own research or consult a licensed financial advisor before making investment decisions.
References
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