Oracle Corp (NASDAQ:ORCL) shares fell more than 11% on Thursday after the software giant reported fiscal fourth-quarter cloud revenue that narrowly missed Wall Street expectations and unveiled plans to raise roughly $40 billion to fund an aggressive AI infrastructure expansion.
The company reported adjusted earnings per share of $2.11 on revenue of $19.18 billion, topping analyst estimates of $1.97 and $19.09 billion, respectively. However, cloud revenue came in at $9.91 billion, slightly below expectations of $9.97 billion. The stock also faced pressure after Oracle disclosed plans to finance new data center construction through a mix of debt and equity offerings.
Yet while Oracle’s shares retreated, investors in AI-focused ETFs appeared largely unfazed.
Major ETFs tracking technology and AI companies, including the Invesco QQQ Trust (NASDAQ:QQQ), Technology Select Sector SPDR Fund (NYSE:XLK), Vanguard Information Technology ETF (NYSE:VGT), First Trust Cloud Computing ETF (NASDAQ:SKYY), and Global X Cloud Computing ETF (NASDAQ:CLOU), showed little meaningful movement following the earnings release, suggesting investors viewed Oracle’s results as a company-specific event rather than a warning sign for the broader AI trade. Each of these ETFs moved about 1% on either direction.
Why ETFs Didn’t React
The muted response may reflect the fact that several key indicators of AI demand remained intact despite the cloud revenue miss.
Oracle reaffirmed its fiscal 2027 revenue target of $90 billion and reported remaining performance obligations (RPOs) of $638 billion, well ahead of analyst expectations of $589.5 billion. The metric, which represents contracted revenue yet to be recognized, has become an important gauge of future cloud and AI demand.
Investors also found encouragement in Oracle Cloud Infrastructure revenue, which reached $5.79 billion and exceeded expectations of $5.72 billion. The business has emerged as one of the company’s primary beneficiaries of the AI infrastructure boom.
The earnings report arrives as Oracle continues to deepen its relationship with OpenAI, one of the largest drivers of AI-related computing demand. The company remains a key infrastructure partner for the AI startup, whose computing requirements continue to expand alongside the broader generative AI race.
A Shift In The AI Narrative
For much of the past two years, AI-related ETFs have been driven by semiconductor stocks and hyperscale cloud providers. Increasingly, however, investors are paying attention to the infrastructure companies responsible for supplying computing capacity and data center services.
Oracle’s earnings suggest that investors may be looking beyond quarterly cloud revenue fluctuations and focusing instead on long-term indicators of AI spending. The company’s massive contract backlog, expanding infrastructure business, and continued investment in data centers appear to have outweighed concerns about a modest revenue miss.
If the broader ETF market’s reaction is any indication, investors likely still see Oracle’s results as evidence of sustained AI demand, even if they are less enthusiastic about the near-term impact of a $40 billion spending plan on Oracle’s own stock.
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