Oracle Corp.’s shares fell 6% in after-hours trading as Q3 revenue of $14.13 billion missed estimates. The firm announced plans to double data center capacity for AI workloads and raised FY2025 capex to $16 billion.
Oracle’s Q3 revenue fell short of Wall Street expectations, overshadowing robust cloud infrastructure growth and ambitious AI-driven expansion plans.
Earnings Disappoint Amid Cloud Growth
Oracle reported Q3 revenue of $14.13 billion, a 6% year-over-year increase but below the $14.3 billion analysts expected, according to Refinitiv data. Shares dropped 6% in extended trading on March 10, 2025. The company attributed the shortfall to slower license updates for legacy software, offset partially by a 49% surge in cloud infrastructure revenue to $2.7 billion.
Doubling Down on AI Infrastructure
CEO Safra Catz announced plans to double data center capacity by mid-2026 to meet soaring demand for AI workloads. ‘Our Generation 2 Cloud Infrastructure has become the backbone for mission-critical AI deployments,’ Catz stated in the earnings release. Oracle raised its FY2025 capital expenditure forecast to $16 billion, up from $10 billion, to fund its ‘Stargate’ project with partners OpenAI and SoftBank.
Analysts Express Caution
Wedbush Securities analyst Dan Ives noted, ‘While Oracle’s cloud momentum is undeniable, the margin impact of this aggressive expansion could pressure earnings through 2026.’ Bernstein Research highlighted concerns about intensifying competition from AWS and Microsoft Azure in cloud-based AI solutions.
Oracle’s earnings call revealed that 40% of new cloud bookings are AI-related. The company plans to open 12 new data centers exclusively for AI workloads by Q4 2025, with three locations already operational in Phoenix, Frankfurt, and Mumbai.
