Cloud computing business shows steady growth, Oracle Corporation (ORCL.US) Q2 financial report does not have any "big surprises".

Oracle Corporation (ORCL.US) announced quarterly revenue that was in line with market expectations, disappointing investors. In recent weeks, investors had driven Oracle Corporation's stock to record highs due to their enthusiasm for the company's cloud business. However, after the performance announcement, Oracle Corporation's stock price fell in after-hours trading. In a statement on Monday, Oracle Corporation reported second quarter revenue of $14.1 billion, a 9% year-over-year increase. Revenue from the highly anticipated cloud infrastructure business surged 52% to $2.4 billion, in line with market expectations. As of November 30th, remaining performance obligations (a measure of order bookings) were $97 billion, lower than the previous quarter's $99.1 billion. Earnings per share, excluding some items, were $1.47, compared to market expectations of $1.48. Total cloud revenue (including infrastructure and applications) was $5.9 billion, slightly lower than analysts' average estimate of $6 billion. For a long time, Oracle Corporation has been trying to establish itself in the lucrative computing and storage rental industry, a market dominated by much larger competitors such as Amazon.com, Inc.'s AWS and Microsoft Corporation. Oracle Corporation's recent success has been driven by the demand from AI companies to train their models, as well as from major clients like Uber Technologies, Inc. and TikTok. Oracle Corporation Chairman Larry Ellison has been particularly focused on the company's ability to provide hardware and integrated software for processing powerful AI workloads. Oracle Corporation CEO Safra Catz stated in the announcement that cloud revenue for the fiscal year ending in May will exceed $25 billion, matching Wall Street's estimate of $25.1 billion. Ellison stated in the announcement that Oracle Corporation's cloud has "trained several of the world's most important generative artificial intelligence models because we are faster and cheaper than any other cloud." He added that Meta Platforms has signed an agreement to use Oracle Corporation's cloud infrastructure to develop the Meta-based Llama model AI agent. Last week, the U.S. Federal Appeals Court upheld a law requiring the sale of TikTok. Oracle Corporation warned investors that the ban on TikTok could harm its financial performance. After the financial report was released, Oracle Corporation's stock price fell by 7.63% in after-hours trading. Prior to the financial report, there had been high expectations for Oracle Corporation, with its stock price having risen by 81% so far this year. Bloomberg Intelligence analyst Anurag Rana said, "Perhaps investors were expecting a very big surprise--but that did not happen." Rishi Jaluria, Capital Markets analyst at Royal Bank of Canada, described this quarter's performance as "mixed, going against overly high expectations."