Oracle's Cloud Growth Concerns Shake Markets: Shares Plunge 9%
Oracle faces market jitters as cloud growth lags, shares drop 9%. Tepid forecast raises concerns over business expansion. Get the latest on Oracle's performance.
Oracle had a tough time in the latest quarter. The sales of its cloud services weren't as good as expected, and the outlook for the future doesn't look bright. This led to a 9% drop in Oracle's shares during premarket trading.
Oracle's part of the business that deals with cloud infrastructure (the technology behind services like Amazon Web Services and Microsoft Azure) hasn't been growing as fast as before. Investors are worried because this is a big part of Oracle's plans for the future.
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Despite Oracle's shares going up by 40% this year, some people are now unsure. Oracle, co-founded by billionaire Larry Ellison, has been spending a lot to build data centers, aiming to become a major player in cloud services.
Oracle explained that the weak results were due to problems with getting enough supplies. The CEO, Safra Catz, mentioned that there's a huge demand for Oracle's services in generative AI and cloud infrastructure.
However, this didn't ease the concerns of analysts. At least four groups that study the stock market lowered their expectations for Oracle's stock after seeing the results.
The overall revenue from Oracle's cloud services, which include software, went up by 25% in the last quarter. But this was less than what the company expected, falling short of the projected 29%-31% growth.
Oracle blamed factors like businesses spending less and facing tough competition for these challenges. Looking ahead, Oracle predicted that its revenue in the next quarter would grow by 6%-8%, including the health data software platform Cerner.
This prediction didn't match what analysts were expecting, adding to worries about Oracle's ability to keep growing in a competitive market. In summary, Oracle is dealing with concerns from investors due to not-so-good cloud sales, an uncertain future, and tough competition in the cloud services industry.
