In its fiscal third quarter, Oracle reported revenue growth of just 3% year-over-year, marking its weakest quarterly expansion since 2021. License and cloud subscription revenues climbed by only 2%, while on-premises license support—a historically stable cash generator—grew by a mere 1%. This slowdown followed two consecutive quarters of stronger double-digit cloud growth, surprising analysts who had expected a rebound in software-as-a-service demand.

Oracle’s decision to put significant AI and data center investments on its balance sheet has heightened scrutiny. The company disclosed approximately $8 billion in data center assets and related leases, up 25% from the prior year. With depreciation and amortization expenses rising by $300 million sequentially, some investors fear that any downturn in AI spending could trigger asset writedowns and leverage strain—risks not shared by peers who utilize third-party financing structures.

Since mid-September 2025, Oracle’s shares have fallen by 41%, reflecting worries over near-term earnings and OpenAI’s growth trajectory. Nevertheless, UBS maintains a Buy rating, projecting 10% revenue acceleration in the first half of 2026 driven by renewed enterprise cloud commitments. The firm forecasts adjusted operating margin expansion of 150 basis points next year, citing improved sales execution and cost synergies expected from recent data center investments.