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Jon Keegan & David Crowther

Oracle sinks as cloud division misses and company plans $15 billion more capex

Shares of Oracle fell in after-hours trading Wednesday — and remained under pressure in the premarket session Thursday morning, down more than 11% as of 5:20 a.m. ET — after a headline beat on earnings was overshadowed by softer revenue.

Adjusted earnings per share were $2.26, up 54% year on year, blowing past analyst expectations of $1.64 per share. However, this beat was primarily due to the disposal of its Ampere chip company to SoftBank, which boosted pretax earnings by $0.91 per diluted share, Barron’s reported.

Revenue for the quarter was $16.06 billion, up 14% year on year but missing estimates of $16.2 billion.

The big weakness weighing most heavily on the stock this morning seems to be Oracle’s cloud computing unit, where sales came in at $8 billion for the quarter, up 34% year on year. Analysts had been expecting $8.8 billion.

The other major talking point heading into the print — how much Oracle was investing in capex for new data centers — has proven to be another sticking point again. On the earnings call, Doug Kehring, the company’s principal financial officer, said:

“...given the added RPO this quarter that can be monetized quickly starting next year, we now expect fiscal 2026 CapEx will be about $15 billion higher than we forecasted after Q1.”

That will do little to alleviate concerns around Oracle’s diverging free cash flow and net income, though the company’s execs did also say that they expect total cloud revenue to grow 40% to 44% in the coming quarter. Leadership also said they believe they can convert some of the added backlog to revenue sooner than expected, adding $4 billion of “additional revenue in FY27.”

Oracle shares got a huge boost in September, after the company announced a $300 billion deal with OpenAI, but all of that value has since disappeared. Shares are up 30% for the year so far.

Last quarter, Oracle reported $455 billion in RPOs (remaining performance obligations, or backlogged business). For this quarter, the figure was up to $528 billion, having risen 438% from the same period last year.

On selling its interest in the Ampere chip company, Oracle Chairman and CTO Larry Ellison said:

“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

Oracle shares got a huge boost in September, after the company announced a $300 billion deal with OpenAI, but all of that value has since disappeared. Shares are up 30% for the year so far.

Last quarter, Oracle reported $455 billion in RPOs (remaining performance obligations, or backlogged business). For this quarter, the figure was up to $528 billion, having risen 438% from the same period last year.

On selling its interest in the Ampere chip company, Oracle Chairman and CTO Larry Ellison said:

“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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