Why Oracle Stock Price Dropped After Earnings Call

Benzinga

Oracle just posted massive Q2 FY2026 earnings — including a 438 percent surge in remaining performance obligations and cloud infrastructure growth in the mid-60 percent range — but the stock still dropped more than 11 percent after hours.  In this video, we break down Oracle’s mixed earnings report, why revenue slightly missed expectations, how earnings crushed estimates, and what Larry Ellison and Mike Sicilia revealed about Oracle’s “cloud neutral” and “chip neutral” strategies. We also cover Oracle’s AI infrastructure demand, the 817 percent spike in multicloud database consumption, and why free cash flow came in negative 10 billion during a heavy capital-spending quarter.  Oracle’s stock (ORCL) closed around 223 dollars before falling to roughly 197 after hours as traders weighed the company’s massive AI backlog against its steep AI-related capex. Whether you’re a day trader, investor, or following AI infrastructure plays, this breakdown explains the tug-of-war happening inside Oracle right now.

Transcript

00:00Oracle's AI cloud is exploding, so you might be asking yourself, why is the stock tanking then?

00:06Oracle just reported the kind of AI cloud numbers most companies dream about, but the stock is

00:11getting hit anyways. In Q2, Oracle's revenue came in around $16.1 billion, just shy of Wall Street's

00:18$16.2 billion expectation, but earnings smashed estimates at 2.26 per share, more than 50% higher

00:26than a year ago. Under the surface, the AI engine is in overdrive. Cloud infrastructure revenue jumped

00:32in the mid-60% range. Total cloud is now about half of Oracle's business. And remaining performance

00:39obligations, future contracted revenue, have exploded to roughly $523 billion. That's up over 430%

00:48year-over-year. Co-CEO Mike Cecilia says Oracle is cloud-neutral, letting customers run its databases

00:54on any major cloud. And its multi-cloud database business is now the fastest-growing line, up 817%

01:02in Q2. Larry Ellison says Oracle is also going chip-neutral, selling its stake in Ampere, and

01:08working with all major CPU and GPU suppliers while still buying the latest NVIDIA GPUs. So why is the

01:15stock down even with those AI headlines? Oracle closed the day around $223 a share, but in after-hours

01:22trading, it slid to about $197, down roughly 11.5% once investors digested the earnings call.

01:29Traders are staring at the bill for all that AI growth, including $10-billion in free cash flow

01:35this quarter due to massive data center capex, and asking whether Oracle can turn this massive AI

01:41backlog into high-margin cash fast enough. If you're trading Oracle short-term, this quarter is a huge

01:47tug-of-war, huge AI demand and record backlog on one side, funding, capex, and margin worries on the

01:54other. So stay vigilant, do your research, and check back in here to get real-time news impacting the market.

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