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Jon Keegan & David Crowther

Oracle sinks as cloud division misses and company plans $15 billion more capex

Shares of Oracle fell in after-hours trading Wednesday — and remained under pressure in the premarket session Thursday morning, down more than 11% as of 5:20 a.m. ET — after a headline beat on earnings was overshadowed by softer revenue.

Adjusted earnings per share were $2.26, up 54% year on year, blowing past analyst expectations of $1.64 per share. However, this beat was primarily due to the disposal of its Ampere chip company to SoftBank, which boosted pretax earnings by $0.91 per diluted share, Barron’s reported.

Revenue for the quarter was $16.06 billion, up 14% year on year but missing estimates of $16.2 billion.

The big weakness weighing most heavily on the stock this morning seems to be Oracle’s cloud computing unit, where sales came in at $8 billion for the quarter, up 34% year on year. Analysts had been expecting $8.8 billion.

The other major talking point heading into the print — how much Oracle was investing in capex for new data centers — has proven to be another sticking point again. On the earnings call, Doug Kehring, the company’s principal financial officer, said:

“...given the added RPO this quarter that can be monetized quickly starting next year, we now expect fiscal 2026 CapEx will be about $15 billion higher than we forecasted after Q1.”

That will do little to alleviate concerns around Oracle’s diverging free cash flow and net income, though the company’s execs did also say that they expect total cloud revenue to grow 40% to 44% in the coming quarter. Leadership also said they believe they can convert some of the added backlog to revenue sooner than expected, adding $4 billion of “additional revenue in FY27.”

Oracle shares got a huge boost in September, after the company announced a $300 billion deal with OpenAI, but all of that value has since disappeared. Shares are up 30% for the year so far.

Last quarter, Oracle reported $455 billion in RPOs (remaining performance obligations, or backlogged business). For this quarter, the figure was up to $528 billion, having risen 438% from the same period last year.

On selling its interest in the Ampere chip company, Oracle Chairman and CTO Larry Ellison said:

“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

Oracle shares got a huge boost in September, after the company announced a $300 billion deal with OpenAI, but all of that value has since disappeared. Shares are up 30% for the year so far.

Last quarter, Oracle reported $455 billion in RPOs (remaining performance obligations, or backlogged business). For this quarter, the figure was up to $528 billion, having risen 438% from the same period last year.

On selling its interest in the Ampere chip company, Oracle Chairman and CTO Larry Ellison said:

“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

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Luke Kawa
3h
Qualcomm spikes despite poor forecast, citing progress with “leading hyperscaler” and an imminent return to growth in China

Qualcomm, a chip company seemingly left behind in AI, is trying to lean in more to the boom.

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Max Knoblauch

Ford raises its full-year guidance, receives $1.3 billion tariff refund

Ford reported its first-quarter results after markets closed on Wednesday. The automaker’s shares climbed roughly 7% in after-hours trading on the news.

For Q1, Ford reported:

  • Adjusted earnings of $0.66 per share, compared to the $0.18 per share expected by Wall Street analysts polled by FactSet. The figure includes Ford’s tariff reimbursement.

  • $43.25 in total revenue, vs. the $42.66 billion consensus forecast. Automotive revenue came in at $39.8 billion, compared to estimates of $38.9 billion.

  • A $1.3 billion tariff refund.

Ford boosted its full-year guidance for adjusted earnings before interest and taxes to between $8.5 billion and $10.5 billion, up from between $8 billion and $10 billion.

Late last year, Ford announced it would take $19.5 billion in charges — one of the largest write-downs ever — relating mostly to its EV business. Of those charges, $7 billion will be spread across this year and next, the company said.

Earlier this month, Ford recorded an 8.8% drop in Q1 sales from the same period last year, a similar result to Detroit rival GM, which posted a 9.7% sales drop.

markets
Jon Keegan

Microsoft beats on revenue and earnings in Q3, but only meets expectations for cloud growth

Microsoft shares dipped after the company reported strong Q3 earnings postmarket Wednesday, posting ​​sales of $82.9 billion for the quarter, beating FactSet analyst estimates of $81.4 billion. Earnings per share were $4.27, handily beating estimates of $4.05. 

In a closely watched number, Microsoft’s Azure cloud business increased 40% year on year, just above the 39.7% estimated. The metric technically beat expectations, but may not be the beat investors were looking for.

Total capital expenditure for the quarter was $31.9 billion, up 49% year on year, above estimates of $27.5 billion and down from Q2’s $37.5 billion.

One thing investors were eager to find out: how is the company doing in its effort to fulfill the billions in backlogged commercial bookings? Last quarter, the company reported a staggering $625 billion in remaining performance obligations, and 45% of that was for just one customer — OpenAI.

For the third quarter, Microsoft reported a backlog of $627 billion, up 99% year on year. The company said the RPO increase was 26% — in line with “historical seasonality” — when excluding OpenAI.

Breaking down the results by the company’s business lines:

  • ☁️ 🤖 Intelligent Cloud (Azure, server products): $34.7 billion in revenue, up 30% year on year.

  • 📝 📊 Productivity and Business Processes (Microsoft 365, LinkedIn, Dynamics): $35 billion in revenue, up 17% year on year.

  • 💻 🎮 More Personal Computing (Windows, Xbox, Bing): $13.2 billion in revenue, down 1% year on year.

Microsoft CFO Amy Hood said in the earnings release:

“We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud.”

Max Knoblauch
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Carvana reports better-than-expected Q1 sales, gross profit per vehicle

Carvana reported its first-quarter earnings after markets closed on Wednesday.

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Luke Kawa
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Amazon reports strong Q1 results with mixed Q2 guidance

The e-commerce and cloud giant just released quarterly results.

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