Oracle Stock Slumps After Cloud Sales Growth Slows
By George Stahl, Deputy Corporate Coverage Chief
Updated 1 hour ago
Shares of Oracle (ORCL) slid in morning trading after the software giant reported quarterly sales that underwhelmed investors. Oracle’s revenue rose 9% to $12.45 billion, meeting analyst estimates. However, it was the slower rate of growth in cloud revenue that caused concern.
Cloud revenue, which has been a major driver of Oracle’s growth, rose by 30% compared to the previous year. While still a significant increase, this marked a slowdown in growth compared to the previous and year-earlier quarters. This news disappointed investors, leading to a drop in the company’s stock price.
In addition to the slower cloud revenue growth, Oracle also gave a lackluster sales outlook for the current quarter. This further fueled investor anxiety about the company’s future prospects. Despite the overall revenue growth and meeting analyst estimates, the market was expecting stronger performance in the cloud segment.
Oracle has been investing heavily in its cloud business, trying to catch up with competitors such as Amazon Web Services and Microsoft Azure. While the 30% growth in cloud revenue is still impressive, it may not be enough to satisfy investor expectations. Concerns have been raised about Oracle’s ability to maintain its competitive position in the rapidly expanding cloud computing market.
The company’s stock slump reflects the market’s reaction to the slower growth and lackluster sales outlook. As of now, Oracle’s stock is facing pressure, and the immediate future of the stock price remains uncertain as investors evaluate the company’s performance.
It will be interesting to see how Oracle responds to the slower cloud revenue growth and whether they can regain investor confidence. As competition in the cloud market intensifies, Oracle will need to demonstrate its ability to adapt and innovate to stay ahead in this fast-paced industry.