Oracle's (ORCL) FQ2 Cloud Revenue Misses Expectations Despite Strong AI Bookings and Backlog

Oracle Corporation (NYSE:ORCL) is one of the best Reddit stocks to invest in right now. On December 11, KeyBanc lowered the firm’s price target on Oracle to $300 from $350 with an Overweight rating on the shares. Despite the optimism regarding prospects, the company’s recent results for FQ2 2026 fell short, specifically in the cloud division.

Cloud revenue and gross margin missed expectations, and IaaS growth to $4.1 billion was slightly below the anticipated $4 billion. Although the total remaining performance obligation exceeded $500 billion, matching firm forecasts, the weak share reaction indicates that investors prioritize current execution over large, future-facing contract backlogs.

In the said quarter, Oracle’s total revenue reached $16.1 billion, which marked a 13% year-over-year increase. Cloud revenue, now accounting for exactly half of the company’s total revenue, grew by an impressive 33% to $8 billion. This growth was primarily fueled by the Cloud Infrastructure segment, which soared 66% to $4.1 billion. Specifically, GPU-related revenue within the cloud infrastructure business grew by a remarkable 177%, indicating intense demand for Oracle’s AI infrastructure. Additionally, Cloud Database Services revenue increased by 30%, with Autonomous Database revenue growing by 43%, while Cloud Applications revenue grew 11% to $3.9 billion.

Oracle Corporation (NYSE:ORCL) offers products and services that address enterprise information technology environments worldwide.

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Disclosure: None. This article is originally published at Insider Monkey.