Oracle shares dropped 9% in premarket trading after reporting another quarter of below-expectations cloud sales and a bleak forecast, raising concerns about the company's growth. The revenue growth of Oracle's cloud infrastructure unit, which competes with Amazon Web Services and Microsoft Azure, has slowed over the past three quarters. Despite blaming supply constraints for the weak results, analysts expressed doubts about Oracle's prospects and several brokerages lowered their price targets on the stock. Weaker enterprise spending and intense competition were also cited as factors impacting the company's overall results. Oracle's forecast for third-quarter revenue growth fell below analysts' average estimate.
Google has delayed the release of its conversational AI, Gemini, which aims to compete with OpenAI's ChatGPT. The company had initially promised access to Gemini by November but has now informed customers and partners that it won't be available until the first quarter of next year. This delay comes at a challenging time for Google, as its cloud sales growth has slowed while Microsoft's has accelerated, partly due to selling OpenAI's technology to its customers.
Oracle's stock slumped after the software giant reported quarterly sales that fell short of investor expectations, despite a 9% increase in revenue to $12.45 billion. While cloud revenue continued to drive growth, rising 30% YoY, it represented a slower rate compared to previous quarters. Additionally, the company provided a lackluster sales outlook for the current quarter.
