Earnings per share were up by 24 percent, while total revenue was $14.1 billion, up 9 percent, driven by solid gains in the cloud infrastructure business.
“The key number to watch here for growth is cloud infrastructure,” Rebecca Wettemann, CEO of industry analyst firm Valoir, told The Epoch Times.
“Oracle’s presence, while still smaller than AWS, Google, and Microsoft, is growing—when just a few years ago Oracle wasn’t taken seriously in the space. Oracle also has much deeper and broader business relationships with many of its customers than the hyperscalers that have a limited play beyond cloud infrastructure that it can leverage to its advantage.”
Management was pleased with the company’s performance.
“Record level AI demand drove Oracle Cloud Infrastructure revenue up 52 percent in the second quarter, a much higher growth rate than any of our hyperscale cloud infrastructure competitors,” Oracle CEO Safra Catz said in a statement accompanying the release of the financial results.
“Growth in the AI segment of our infrastructure business was extraordinary—GPU consumption was up 336 percent in the quarter—and we delivered the world’s largest and fastest AI supercomputer scaling up to 65,000 NVIDIA H200 GPUs [graphics processing units].”
Wall Street didn’t share management’s sentiment, sending Oracle’s shares sharply lower after hours on Dec. 9 and in the pre-opening hours on Dec. 10. Oracle is still, however, up by 80 percent for the year, suggesting that the recent drop in the company’s shares may be just profit-taking rather than something more serious.
According to Sidharth Ramsinghaney, director of strategy and operations at cloud communications company Twilio, Oracle’s second-quarter results reveal a fascinating strategic tension. While the company is making significant strides in cloud infrastructure and AI capabilities, evidenced by the 52 percent growth in cloud infrastructure, to $2.4 billion, the overall growth story shows signs of deceleration, he said
“This presents both opportunities and challenges in Oracle’s transformation from a traditional database company to a cloud and AI player,” he told The Epoch Times.
Ramsinghaney said the real story isn’t the quarterly miss but Oracle’s evolving market position.
“With cloud services now accounting for 77 percent of total revenue ($10.81 billion), we’re seeing a successful business model transformation,” he said. “However, the deceleration in growth rates suggests Oracle is hitting the natural challenges of scale in this transition.”
Ramsinghaney said Oracle’s strategic partnership with Meta for Llama model development is a critical step in this transition.
“While AWS, Azure, and Google Cloud dominate the cloud infrastructure space, Oracle is carving out a distinctive position in AI workloads,” he said.
That’s something Larry Ellison, Oracle chairman and chief technology officer, emphasized following the release of the second-quarter financial results.
“Oracle Cloud Infrastructure trains several of the world’s most important generative AI models because we are faster and less expensive than other clouds,” he said.
“And we just signed an agreement with Meta—for them to use Oracle’s AI Cloud Infrastructure—and collaborate with Oracle on the development of AI Agents based on Meta’s Llama models. The Oracle Cloud trains dozens of specialized AI models and embeds hundreds of AI Agents in cloud applications.”
Still, Ramsinghaney expressed concern about growth and sustainability, as evidenced by Wall Street’s adverse reaction to the second-quarter financial results.
“While the company’s projection of 7 percent to 9 percent revenue growth for next quarter might seem solid, it’s below market expectations,” he said. “This raises questions about Oracle’s ability to maintain momentum in an increasingly competitive cloud market.”
Ramsinghaney said the key to Oracle’s success will likely depend on three factors. First, the execution of its AI infrastructure strategy, particularly the deployment of 131,000 Nvidia Blackwell GPUs. Second, maintaining competitive differentiation in a market dominated by larger cloud providers. Third, effectively converting an extensive enterprise customer base to cloud and AI services.
“This isn’t just a story about quarterly numbers—it’s about Oracle’s transformation into a major player in the cloud and AI era while managing the expectations that come with their impressive 80 percent stock appreciation this year,” he said.
That’s difficult in a market for AI that runs hot.
“As companies transition from the FOMO (fear of missing out) phase to the FOMU (fear of messing up) phase of generative AI adoption, providers will need to step up,” Wettemann said.
“Explaining their approach and showing their unique value to customers will be crucial—not just for driving adoption but for delivering real, lasting value.”
