Following Oracle? Mark Your Calendars for Dec. 10.
Key Points
The artificial intelligence cloud provider released a blowout earnings report back in September that noted huge new demand for its AI cloud business.
But not long after, Oracle's stock retreated as investors grew increasingly concerned about the debt required to fulfill that demand.
Another potential moment of clarity about Oracle is rapidly approaching.
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Oracle (NYSE: ORCL) has had a big year, solidifying its position as one of the major artificial intelligence (AI) players to watch. Despite extreme volatility this year, the stock still trades up about 30%, outperforming the broader market.
Oracle made a big splash in September with its earnings report for the first quarter of fiscal year 2026. The company reported jaw-dropping demand in its AI cloud business. Oracle reported $455 billion in remaining performance obligations (RPOs), 359% higher year over year, largely driven by demand for its AI cloud services. The stock price ripped nearly 40% higher following the report.
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However, since then, Oracle has given back most of those gains after the company reported it would need to take on significant debt to fund the expansion of its AI infrastructure. Media outlets also reported that Oracle is operating with extremely thin margins in its AI cloud business.
Now, another big day is fast approaching for Oracle. Investors should mark their calendars for Dec. 10.
Another big earnings report
Oracle will report earnings for its second quarter of fiscal year 2026 after the market closes on Wednesday, Dec. 10. Investors will undoubtedly be looking for assurances from management that the company can manage its AI infrastructure build-out in a financially prudent manner, as well as other clues about broader AI demand.
Citi analyst Tyler Radke said in a recent research note that he believes "concerns around Oracle's debt health" are "overstated." Radke also expects Oracle to report another strong RPO number of $600 billion, which could rejuvenate sentiment.
It's always difficult to predict what a company will report for earnings, and even more difficult to predict how the market will react. That's why I wouldn't recommend trying to trade around this earnings event, especially with Oracle's stock having been so volatile in recent months.
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Citigroup is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.
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