Oracle's shares dropped 8.3% in after-hours trading following its quarterly report, as concerns over overstated AI-driven growth weighed on investor sentiment. The company reported revenue of $13.2 billion, slightly below analysts' expectations, with cloud revenue growth at 17%, down from 22% in the prior quarter. Broadcom's results after the market close will be closely watched as the next gauge of technology sector resilience.
- Oracle’s Q3 revenue: $13.2 billion, below $13.4 billion expected
- Cloud revenue growth: 17% YoY, down from 22% in prior quarter
- Oracle stock dropped 8.3% in after-hours trading
- R&D spending on AI: $1.8 billion in Q3 2025
- Market cap decline: $12.7 billion since start of quarter
- Broadcom’s expected revenue: $10.9 billion, cloud growth forecast at 21%
Oracle's stock fell sharply in after-hours trading, shedding 8.3% following the release of its fiscal Q3 earnings. The Santa Clara-based software giant reported revenue of $13.2 billion for the quarter ended November 30, 2025, marginally below the $13.4 billion analysts had forecasted. Despite a 17% year-over-year increase in cloud revenue, the pace of growth decelerated from 22% in the previous quarter, raising concerns about the sustainability of its AI-powered transformation narrative. Investors appear increasingly wary of the broader tech sector's reliance on AI-driven valuations. Oracle's guidance for the next quarter projected revenue between $13.2 billion and $13.5 billion, which fell short of the $13.6 billion consensus. The company also noted that AI-related product adoption has slowed in certain enterprise segments, particularly in North America and Europe, where spending remains cautious amid macroeconomic uncertainty. The market reaction underscores a growing divergence between high-profile AI announcements and actual revenue traction. While Oracle continues to invest heavily in AI infrastructure—allocating $1.8 billion in R&D during the quarter—the return on those investments appears muted. This has triggered caution among institutional investors, leading to a $12.7 billion reduction in Oracle's market cap since the start of the quarter. Broadcom’s earnings report, scheduled for release after the close of trading on December 11, will serve as the next critical benchmark for the sector. The semiconductor and infrastructure software leader is expected to report revenue of approximately $10.9 billion, with cloud services revenue forecasted to grow 21%. Given Broadcom’s strong performance in AI-optimized chips and its dominance in data center infrastructure, its results could either validate or challenge the current tech valuation framework.