Oracle Eyes 20% Revenue Growth, to Cut Thousands of Jobs and Cancel Texas AI Expansion
Analysts forecast Oracle’s fiscal third-quarter profit of $1.70 per share on $16.91 billion revenue, marking 20% sales growth and 16% profit expansion, though revenue topped estimates in two of the past eight quarters. The company will cut thousands of jobs while boosting AI data center capacity and canceling a Texas expansion.
1. Earnings Forecast
Analysts expect Oracle to report fiscal third-quarter earnings of $1.70 per share on $16.91 billion in revenue, representing 20% year-over-year sales growth and 16% profit expansion. Revenue has exceeded forecasts in only two of the past eight quarters, highlighting mixed performance against estimates.
2. Workforce Reduction and AI Investment
Oracle plans to cut thousands of roles across multiple divisions while ramping up spending on AI-focused data center capacity. Some positions are slated for replacement by automation tools driven by artificial intelligence to streamline operations and reduce costs.
3. Texas Data Center Expansion Cancelation
Oracle and OpenAI have scrapped a planned flagship AI data center expansion in Texas after extended financing negotiations and shifting demand conditions. The decision introduces uncertainty around the scale and timing of the company’s AI infrastructure rollout.
4. Capital Markets and Valuation
Oracle raised $25 billion through a bond sale to fund AI data center construction and holds nearly $500 billion in performance obligations, including an estimated $300 billion tied to OpenAI. Valuation multiples have compressed sharply since September, prompting an upgrade to an outperform rating with a $185 price target.