Oracle Stock Pulls Back as Alphabet Earnings Weigh on AI Shares

Oracle (NYSE: ORCL) shares slipped 3% to $140.36 in early premarket trading Thursday, reversing some of Wednesday’s Investor Day-driven advance as AI-related tech stocks weakened amid investor disappointment over Alphabet’s third-quarter earnings.

Google’s parent company’s shares dropped roughly 10% in extended trading after its quarterly revenue and adjusted earnings missed Wall Street expectations. Nasdaq-100 futures also fell more than 1% Wednesday evening, reflecting broader pressure on technology stocks following the report.

Alphabet’s Earnings Renew Concerns Over AI Infrastructure Spending

Alphabet reported third-quarter revenue of $127.58 billion, up 25% from a year earlier but below the FactSet consensus estimate of $127.97 billion.

Net income available to common shareholders declined approximately 25% to $26.17 billion. GAAP diluted earnings were $2.12 per share. An $8.66 billion loss on equity securities reduced earnings by $0.55 per share after tax; excluding that effect yields $2.67 per share, below the $3.02 consensus estimate from analysts surveyed by FactSet.

Alphabet also recorded negative free cash flow of $9.1 billion, its second consecutive quarterly shortfall, as capital expenditures reached $51.4 billion. Inventory purchases for its custom AI processors and a $5.2 billion payment related to a European Commission fine also weighed on operating cash flow.

Chief Financial Officer Anat Ashkenazi said capital spending would rise significantly in 2027, after the company projected spending between $195 billion and $205 billion for 2026.

The spending outlook contrasted with continued growth in Alphabet’s cloud business, where quarterly revenue surged 103% to $30.7 billion. Companywide operating income also increased 30%.

Google Search & other revenue rose 12% year over year to $63.35 billion, slowing from 17% growth in the previous quarter. Alphabet’s $82.01 billion in advertising revenue was also approximately $1.4 billion below analysts’ expectations.

Rising infrastructure costs, combined with weaker-than-expected earnings, renewed concerns about the cash requirements of large AI investments, a financial issue Oracle also faces as it expands its cloud computing capacity.

Oracle Retains Much of Wednesday’s Gain Despite Premarket Pullback

Oracle closed the previous regular session at $144.54, up 10.73% from $130.53. Trading volume reached 81.9 million shares, approximately 2.7 times the three-month daily average of 30 million shares.

At the indicated premarket price, Oracle remained about 7.5% above its pre-rally closing price, though it had retreated about 5.5% from the previous session’s intraday high of $148.48.

Separately, Oracle Tokenized bStocks (ORCLB) traded at $141.30, up 7.27% over the preceding 24 hours, according to CoinMarketCap. The tokenized instrument is distinct from NYSE-listed Oracle shares and measures performance over a different trading period.

Oracle’s regular-session rally followed its Investor Day in Las Vegas, where co-CEOs Clay Magouyrk and Mike Sicilia and CFO Hilary Maxson outlined financial targets through fiscal 2030.

Oracle expects annual revenue to reach at least $225 billion by fiscal 2030, representing compound annual growth exceeding 35% from fiscal 2026. The company also projected positive free cash flow during the second half of fiscal 2028 and at least $30 billion in fiscal 2029.

To support its expansion, Oracle said it expects to raise no more than $20 billion in additional capital through fiscal 2030, comprising $10 billion in equity and $10 billion in gross debt. The limit excludes refinancing existing debt and is separate from the $20 billion equity raise completed during the first quarter of fiscal 2027.

Oracle expects capital expenditures to peak during fiscal 2027 and 2028 before declining in fiscal 2029. The company also identified vendor financing, customer-provided hardware, and customer prepayments as measures expected to reduce upfront cash requirements.

These projections address Oracle’s longer-term funding needs, while Thursday’s premarket decline follows renewed market scrutiny of AI infrastructure spending after Alphabet’s results.