Oracle’s Q2 disappointed investors, but this analyst isn’t worried

Yahoo Finance Video and Josh Lipton

December 11, 2025

In this video:

ORCL

-5.40%

Oracle’s (ORCL) second quarter earnings results disappointed investors, missing estimates for adjusted revenue. The company did, however, beat estimates on adjusted earnings per share (EPS).

Futurum CEO Daniel Newman joins Market Domination Overtime host Josh Lipton to discuss the earnings print.

To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime.

Video Transcript

00:00 Josh

Let’s get to Futurum CEO Dan Newman. Dan, the results are just hitting. At least initially here, Dan, investors seem disappointed. I got the stock down about 6% in the after hours, but what do you make initially of the report?

00:19 Dan

Yeah, Josh, good to see you. You know, there was an exuberance in the rise, there’s been a exuberance uh in the fall and I think this is another case of they can’t do anything right at this exact moment for their investors. You know, the company had that big open AI contract. I am an AI bull and I do believe the demand is real. I do believe there’s some risk with Open AI, but I think if Open AI was to falter in some way, that demand would be picked up elsewhere. I’m not sure that the street is fully appreciating that. But you saw they came in above on the EPS where a lot of a lot of the complaints were about the company’s ability to make money, ability to support its debt load, uh and that risk that came along with that big Open AI contract. But at the same time, it looks like revenue was a little light. The OCI number was good, but it wasn’t, it didn’t blow anyone away. And so I think right now it’s probably a little bit oversold. I think there’s a bit of an underappreciation for the overall asset that is Oracle and a bit of an over rotation to just focus on that cloud business when you know Josh, because we’ve been covering this company a long time, that this is a company that has a very sturdy business outside of the cloud, and that’s an upside part of their business, but there’s been such a big focus on it.

01:46 Josh

You know, Dan, so the last time they reported, right, the stock had this just historic move initially. Um, and then clearly investors had uh questions. They had questions as you brought up about customer concentration risk with OpenAI. and they clearly had questions about debt risk here. Questions about how exactly is Larry Ellison going to pay for this great AI data center buildout. On the call, Dan, what are you listening for from Oracle executives on those two big topics, those big big themes? What do you want to hear?

02:37 Dan

Of course, Larry Allison’s one of the best at at telling stories. He’s done it for decades now, and he’s been able to continue to build shareholder value. But I think Oracle’s always been one of those companies that’s had to fight, you know, some of the uh the sentiment on the street, you know, maybe Oracle is not the big winner. And then when they just deliver, the investors would follow. But you could see with that kind of Nvidia turn, when there was some concern about Nvidia, some concern about OpenAI, Oracle went down really quickly with it. So what can he say? I mean, first of all, I think he needs to be confident in his strategy and he knows he’s having those conversations, whether it’s around Stargate, whether it’s around other builds and of course how the core business will continue to basically finance some of the growth that the company wants. So it’s not just going to be debt, the whole company has to be operating, creating the cash flow and supporting that bigger debt load and that bigger risk. But I think he also needs to reassure the street much in the way Mark Zuckerberg does to say, hey, look, we may be overinvesting, but it’s sure going to be better than us being on the wrong side of this. You know, Mark had uh going back to Meta, Mark may have gotten reality labs somewhat wrong, but he didn’t get AI wrong and he’s making that big investment. Larry Ellison knows that software as we know it today is at risk. He’s pivoting the company. He has an opportunity. He’s got some really great contracts including the Open AI one, but he does need to prove to his investors that he’s got deals and deal flow well beyond just that particular customer.

04:36 Josh

I know you’re an AI bull Dan, but when you see this print and the reaction, at least initially here to the print, does it get you at all concerned about the greater AI theme and trend we’ve talked so much about?

04:54 Dan

There’s always little cracks. Like I said, there’s a lot of companies that are being pulled along in this AI boom that may not be winners. That’s part of being a super cycle though. That’s the difference between a bubble and a super cycle. Some companies get pulled, they will get blown up in the long run, Josh, but Oracle

05:16 Josh

No.

05:17 Dan

No, I’m not that concerned about Oracle and I’m also not concerned about the trade at large. I do think the demand will continue to be filled, but I think that in these gaps, in these periods of time from when a new data center gets built to the time that is able to generate revenue, people sort of underappreciate that cycle. You know, we have 65 gigawatts plus of data centers being built out. This does not happen overnight. These data centers take time and so they can only grow as fast as they can expand capacity. So the business needs to be continuing to invest, continuing to expand capacity and then show investors that it can fill that capacity and ideally filling that capacity with workloads that are generating revenue, efficiency, productivity and of course seeing more of this business shifting to enterprise AI and beyond just LLMs.

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