Oracle’s stock had slumped around 8% as the company’s quarterly results disappointed expectations and also missed the outlook on cloud business growth.
This is about a technology giant known for its database software and cloud computing services that came out with a rather weaker-than-expected quarterly financial performance, jangling the nerves of investors for future prospects in the corporation.
The cloud company reported earnings that did not beat Wall Street analysts’ expectations, even as the tech major delivered very strong revenue growth in most of its businesses.
These numbers primarily take into account disappointing growth prospects the software powerhouse forecasts for its cloud infrastructure and SaaS businesses. Cloud computing has been among Oracle’s top priorities recently because it tries to gain momentum and catch up with greater opponents like Amazon Web Services, Microsoft Azure, and Google Cloud.
It’s now years since Oracle started investing hugely in expanding its cloud business from its old on-premise model into a scalable cloud offering.
That said, Oracle has really struggled in recent times to take a commanding market share in the competitive cloud industry. Investors had pretty high expectations for Oracle in cloud growth, and Oracle disappointed them by failing to turn that out.
The company said its cloud business, both in cloud applications and cloud infrastructure, grew at a slower pace than expected. While Oracle has been able to win major enterprise customers and create a competitive cloud platform, the growth rate did not meet the high projections many analysts had for the company.
Besides the disappointing cloud performance, Oracle’s quarterly earnings pointed out struggles its hardware and licensing businesses are facing, further adding to investor’s concerns.
Even with revenue up from a year earlier, the mixed performance across divisions has left investors wondering if the company will deliver growth projections in quarters to come.
Executives at Oracle say the company remains committed to growth and innovation in the cloud, and that this investment in cloud infrastructure reflects its long-term commitment to the market. But analysts and investors remain unconvinced: many wonder if it will ever catch up to competitors in the cloud.
The earnings miss, in addition to heightened expectations for its cloud business, has seen Oracle’s stock take a severe beating, shedding almost 8% in value. This decline reflects investor skepticism about the company meeting ambitious growth targets in the highly competitive cloud market.
It now places additional pressure on Oracle to deliver stronger results in the coming quarters in order to restore investor confidence and reverse the downward trajectory of its stock.
