ETFs to Watch as Oracle Dips Despite Beating on Q2 Earnings

Shares of Oracle ORCL dipped more than 10% in the after-hours trading session on Dec. 10, 2025, (as reported by Yahoo Finance) despite surpassing analysts’ bottom-line expectations for the second quarter of fiscal 2026. This pullback was most likely triggered by the company failing to meet revenue estimates, particularly for its cloud business. At the same time, investors remained worried about this cloud giant’s debt issues and a potential AI bubble. 

While this consistent share price slump might come as disappointing news for some investors at the moment, those who are prudent may recognize this as an opportune moment to invest in ORCL shares, considering its solid long-term growth potential. The company remains one of the forerunners in cloud services.  

Notably, OpenAI, Oracle and SoftBank have joined forces for a multi-gigawatt expansion of Stargate, as part of a $500 billion AI infrastructure buildout, positioning Oracle at the center of the world’s largest AI compute network. By anchoring next-generation OpenAI workloads on Oracle Cloud Infrastructure (OCI), Oracle stands to unlock massive long-term cloud revenue growth and materially boost profitability as AI-driven demand scales over the coming years.

However, direct investment in ORCL stock carries unique risks. These include a heavy debt load that the company is currently bearing, which may limit its financial flexibility as AI infrastructure spending accelerates. Moreover, slower enterprise cloud migration, rising energy costs, or delays in GPU supply could also pose material headwinds to Oracle’s long-term cloud profitability, which, in turn, may cause sudden, sharp drops in ORCL’s share value. 

Therefore, for investors looking to capitalize on this recent dip without being fully exposed to the unique single-stock volatility and company-specific challenges that could severely impact ORCL, a more prudent strategy would be to invest in Exchange-Traded Funds (ETFs) with significant exposure to this chipmaker. This approach will allow investors to capture AMD's potential upside while mitigating company-specific risks that might arise from its specialized sector challenges or geopolitical factors.

But before diving straight into these ETFs, let us check ORCL’s overall performance in the third quarter, in terms of other metrics.

A Brief Analysis of ORCL’s Q2 Results

Oracle’s second-quarter fiscal 2026 adjusted earnings of $2.26 per share beat the Zacks Consensus Estimate by 38.7% and surged 54% year over year. Its revenues rose 14%, thanks to explosive growth in cloud infrastructure.

The company’s remaining performance obligations (RPO), expected to be recognized in the next 12 months, grew 40% year over year. 

Segment-wise, cloud revenues increased 34.4% on a year-over-year basis, while the hardware segment’s top line rose 6.6%. On the other hand, services revenues increased 7.4%, whereas software revenues suffered a 3.1% drop. 

The company ended November 2025 with cash and cash equivalents worth $19.24 billion, compared with $10.79 billion as of May 2025-end. Its cash flow from operating activities, for the trailing four quarters, as of Nov. 30, 2025, improved 10% year over year. However, ORCL recorded a free cash outflow of $13.18 billion due to a stupendous 230% hike in its capital expenditure. Its long-term debt amounted to almost $100 billion at the end of the fiscal second quarter.

Oracle now expects to generate $4 billion of additional revenues in fiscal 2027 and incur an additional $15 billion in its fiscal 2026 capital expenditure compared with the previous forecast. Further, as the company is combining its industry-based cloud apps and Fusion cloud apps under one selling organization in each region across the world, it is witnessing increasing cross-selling synergies that are expected to drive higher cloud applications growth rates in the future.

Market Reaction

The deceleration witnessed in Oracle’s share price immediately after the company posted its fiscal second-quarter earnings continued in the next day’s trading session, causing ORCL to lose 10.8% at the bourses on Dec. 11, 2025. 

With Oracle lagging revenue estimates, concerns surrounding its huge debt load, along with reaffirmation of its fiscal 2026 OCI target rather than an increase, rattled some analysts, leading to a price target reduction for the company’s shares. 

Evidently, Scotiabank lowered its price target on Oracle to $260 from $360, whereas Piper Sandler analyst Hannah Rudoff reduced ORCL’s price target from $380 to $290, following the quarterly results release.

Oracle-Heavy ETFs to Watch

Pacer Data and Digital Revolution ETF TRFK

This fund, with net assets worth $400.9 million, offers exposure to 87 large-cap companies that drive transmission, manipulation, storage and use of data. Of these, Oracle holds the third spot, with an 8.98% share of the fund.

TRFK has surged 33.8% year to date. This fund charges 49 basis points (bps) as fees. It traded at a volume of 0.28 million shares in the last trading session. 

iShares Expanded Tech-Software Sector ETF IGV

This fund, with net assets worth $8.49 billion, offers exposure to 110 software companies in the technology and communication services sectors. Of these, Oracle holds the fifth spot, with a 5.86% share of the fund.

IGV has gained 9.7% year to date. This fund charges 39 bps as fees. It traded at a volume of 8.11 million shares in the last trading session. 

FT Vest Technology Dividend Target Income ETF TDVI

This fund, with net assets worth $234.4 million, is an actively managed ETF that offers exposure to 94 securities. It provides investors with current income and a secondary objective of providing capital appreciation. Oracle holds the fifth spot in the fund, with a 6.39% share.

TDVI has soared 29.6% year to date. This fund charges 75 bps as fees. It traded at a volume of 0.10 million shares in the last trading session. 

iShares U.S. Tech Independence Focused ETF IETC

This fund, with net assets worth $978.7 million, is an actively managed ETF that offers exposure to 87 U.S. tech companies with a greater proportion of technological capabilities, revenues, and production in the United States. Of these, Oracle holds the fourth spot, with a 5.86% share of the fund.

IETC has soared 23.6% year to date. This fund charges 18 bps as fees. It traded at a volume of 0.04 million shares in the last trading session. 

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This article originally published on Zacks Investment Research (zacks.com).

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