Oracle disappoints in the last quarter: Will the investment in cloud and AI pay off?

Oracle recently released its financial results for the third quarter of 2025, which indicated a significant gap between analysts’ early expectations and actual performance. The company failed to meet forecasts in terms of both revenue and earnings per share. Despite this, it is important to note that Oracle’s overall revenues actually increased, and net profit even showed a significant jump. In this article, we will analyze in depth the results of the last quarter, and examine the implications of the strategic investments that Oracle is making in the areas of cloud and artificial intelligence on the company’s financial future.

In the third quarter of fiscal 2025, Oracle reported mixed financial results. Adjusted earnings per share were $1.47, lower than the prior forecast of $1.49. The company’s total revenue also missed expectations, totaling $14.13 billion, compared to an estimate of $14.39 billion. However, it is important to note that compared to the same period last year, Oracle’s revenue increased by 6%. Moreover, the company’s net income showed a significant improvement, jumping 22% to $2.94 billion.

Despite the improvement in net income, the company’s forecasts for the next quarter were lower than analysts’ expectations. Oracle expects revenue growth in the range of %-10% , while the market expected an increase of 11%. The earnings per share forecast was also relatively pessimistic, standing at $1.61-1.65, compared to an expectation of $1.79. Investors reacted with disappointment to these forecasts, as they indicate a possible slowdown in the company’s growth rate. For more information, you can read about Oracle’s disappointing quarterly results and how they affect the market.

Oracle’s relatively pessimistic forecasts for the next quarter have disappointed investors, mainly because they contradicted early expectations of accelerated growth. The market had expected Oracle to present more optimistic forecasts, especially in light of the company’s large investments in the cloud and artificial intelligence sectors. The fact that Oracle expects revenue growth at a lower rate than expected, as well as earnings per share lower than forecast, indicates concerns about the company’s future growth rate. Moreover, the pessimistic forecasts have raised questions about Oracle’s ability to recoup the heavy investments it is making and realize the potential inherent in the cloud and artificial intelligence market.

Despite the disappointing forecasts, Oracle’s cloud segment continues to be a significant growth engine for the company. In the third quarter of 2025, cloud services revenue increased by 10% to $11.01 billion, accounting for 78% of Oracle’s total revenue. The cloud infrastructure (IaaS) segment stood out in particular with impressive growth of 49%, bringing it to $2.7 billion. This growth indicates a growing demand for computing power to support artificial intelligence projects, as well as Oracle’s ability to provide advanced cloud solutions that meet market needs.

The company’s chairman and founder, Larry Ellison, noted that customer demand is at an all-time high, and Oracle is working to increase the capacity of its data centers to meet the growing demand. The heavy investments that Oracle is making in expanding its cloud infrastructure are designed to support the continued growth in this sector and establish its position as a leader in the cloud market. The growth in the cloud sector is a bright spot in Oracle’s quarterly results, and indicates the potential inherent in this area.

Oracle is investing significant resources in the field of artificial intelligence, recognizing its inherent growth potential and its importance to the company’s future. As part of this strategy, Oracle signed new contracts with a total value of $48 billion, which increased its outstanding commitments to a whopping $130 billion. In addition, the company expects to invest approximately $16 billion in capital expenditures during the coming year, an amount that is twice as high as the previous year’s investment.

These massive investments are intended to expand Oracle’s cloud infrastructure and support innovative projects in the field of artificial intelligence. The strategic collaboration between Oracle, OpenAI and SoftBank, as part of the “Stargate” project to establish data centers in Texas, emphasizes Oracle’s focus on developing advanced infrastructure to support AI applications. The massive investment in the field of artificial intelligence indicates belief in the growth potential of this market, but also raises questions about Oracle’s ability to return on investments in the long term, and make the investment profitable.

The collaboration between Oracle, OpenAI, and SoftBank, backed by the US government, as part of the “Stargate” project, holds great significance for Oracle’s position in the technology market. The goal of the project is to establish advanced data centers in Texas, which will enable the expansion of the artificial intelligence infrastructure in the US. This collaboration indicates Oracle’s importance in the field of AI, as well as its involvement in national projects of strategic importance to the US. The project is likely to increase demand for Oracle’s cloud services, and strengthen its position as a leader in the AI ​​market. Government involvement in the project emphasizes the strategic importance of the field of artificial intelligence for the US.

In conclusion, Oracle presented weaker-than-expected quarterly results, but continues to invest heavily in the cloud and artificial intelligence areas. The company is increasing its data centers and expanding its collaborations with leading technology companies. The key question is whether these heavy investments will yield the expected return for investors in the long term. The dividend increase may indicate an attempt to maintain investor confidence despite the disappointing results. The company’s future depends on the success of current investments and realizing the growth potential in the cloud and AI market.