Oracle’s stock has taken its biggest nosedive in three months following the company’s disappointing cloud computing sales that missed Wall Street projections.
The tech giant’s second-quarter cloud revenues fell short of analysts’ estimates, and it also gave a disappointing cloud growth forecast for the current quarter.
The miss for last quarter and the lower-than-expected forecast comes as Oracle is trying to transition from an on-premise software licensing and maintenance support business to catch up in the cloud with leaders like Amazon and Microsoft. Oracle has been aggressively releasing new cloud products, including an autonomous database that will be available in January, hiring cloud engineers and adding sales reps as part of its transition into the cloud market.
Oracle Co-CEO Safra Catz told analysts in an earnings conference call that cloud revenue increased 44 percent to $1.52 billion, below the consensus estimate from analysts of $1.56 billion. Catz also said cloud revenue for the current quarter would increase by 21 to 25 percent. Analysts had expected growth closer to 42 percent.
Those two announcements resulted in Oracle shares dropping by as much as 6.4 percent late Friday to $47, which is the biggest intraday drop since Sept. 15, according to Bloomberg. Shares are currently at $48.
“They’re late to that whole cloud battle,” Patrick Walravens, an analyst at JMP Securities, told Bloomberg. “A lot of people already have a solution they are happy with. The question is, what does Oracle bring the table?”