--- title: "\"AI Bull\" Teetering! Oracle's Earnings Report Early Thursday Morning Becomes the Next Key Stress Test" type: "News" locale: "en" url: "https://longbridge.com/en/news/289312408.md" description: "Market focus is centered on whether OCI cloud business growth can meet Analyst Expectations of 92%, whether the Gross Profit Margin will further narrow from 72% in the same period last year, and whether free cash flow can improve. Additionally, risks related to customer concentration in OpenAI and data center expansion capabilities will be key variables in verifying the sustainability of its growth" datetime: "2026-06-10T10:37:53.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/289312408.md) - [en](https://longbridge.com/en/news/289312408.md) - [zh-HK](https://longbridge.com/zh-HK/news/289312408.md) --- # "AI Bull" Teetering! Oracle's Earnings Report Early Thursday Morning Becomes the Next Key Stress Test The rally in AI-related stocks has suddenly weakened. Oracle's fiscal 2026 fourth-quarter earnings report, scheduled for release after the U.S. market close on Wednesday (early Thursday morning Beijing time), will serve as a crucial test of whether this pressured sector can stabilize. A week ago, Broadcom's weak performance guidance ended the strong momentum of chip stocks and AI concept stocks. Since then, the Philadelphia Semiconductor Index has cumulatively fallen by 9.1%, and the Nasdaq 100 Index has also retreated by nearly 5%. Whether Oracle's cloud business revenue can sustain high-speed growth will directly influence the market's judgment on confidence in AI investments. Oracle's stock price had risen by 27% year-to-date at one point, but subsequently underwent a correction alongside high-beta AI stocks such as Dell Technologies and Super Micro Computer, narrowing its year-to-date gain to 5%. The three core focal points of this earnings report are: **whether cloud business revenue can fulfill expectations for high-speed growth, whether the situation of consistently negative free cash flow will persist, and whether the balance sheet is sufficient to support the capital expenditures required for infrastructure construction.** ## **Cloud Business Growth Rate is the Core Highlight** Oracle started with database software and has significantly accelerated its revenue growth in recent years by leveraging cloud service transformation and the explosion in demand for AI computing power. Its Cloud Infrastructure division (OCI) is the primary focus of this earnings report. According to the average Analyst Expectations compiled by Bloomberg, **OCI revenue is expected to increase by 92% year-over-year** in the fiscal 2026 fourth quarter ending this May, far exceeding the 52% growth in the same period last year. Anurag Rana, an analyst at Bloomberg Industry Research, stated that **Oracle's fundamentals are generally strong, with the core issue being whether data center expansion can keep pace with demand**. "The key question is whether they have built enough data centers to accommodate this demand." John Belton, portfolio manager at Gabelli Funds, raised questions about revenue quality. He pointed out that OCI performed steadily last quarter and is expected to continue its acceleration this quarter, but the ensuing question is: **Does the acceleration in revenue growth mean the company is structurally shifting from high-margin, high-stickiness database software business to low-margin, homogenized infrastructure services with customer concentration risks?** ## Cost of Transformation: Shrinking Profits and Cash Flow Dilemma In addition to revenue growth, earnings quality is also under scrutiny. Analysts expect Oracle's adjusted earnings per share for this quarter to be $1.97, a year-over-year increase of approximately 16%; **the Gross Profit Margin is expected to be around 67%, a significant narrowing from approximately 72% in the same period last year.** **Regarding free cash flow, the market expects a negative $3.5 billion in the fourth quarter, worsening from the negative $2.9 billion in the same period last year.** However, this represents a substantial improvement compared to the combined level of over negative $20 billion in the previous two quarters. The cost of the cloud service transformation is clearly visible—continuously rising capital expenditures have kept Oracle's free cash flow negative for an extended period, raising concerns among outsiders about its ability to continuously fund infrastructure expansion. ## Rising Customer Concentration Risk, Earnings Report Becomes Key Verification Window Cyrus Amini, Chief Investment Officer at Hyphen Wealth Management, stated bluntly that the weakness of the balance sheet is pushing Oracle into a position with no retreat. He said: > **"The core issue facing Oracle is: Can it fulfill its ongoing obligations to convert potential revenue into actual revenue? Does the balance sheet leave enough time and space to support this process? If it cannot provide a satisfactory answer, it is not hard to imagine the market heavily penalizing this stock."** He further pointed out that if free cash flow were positive, the market might show tolerance; but with no room for maneuver on the balance sheet, Oracle will find it difficult to recover quickly from declines like other hyperscale cloud vendors. Meanwhile, **Oracle has been troubled by excessive exposure to OpenAI—as Anthropic and Google seize market share in the AI services market, concerns about its customer concentration risk have intensified.** This earnings report will be an important window for Oracle to prove to investors the sustainability of its growth path. ### Related Stocks - [ORCL.US](https://longbridge.com/en/quote/ORCL.US.md) - [ORCX.US](https://longbridge.com/en/quote/ORCX.US.md) - [AVGO.US](https://longbridge.com/en/quote/AVGO.US.md) - [.NDX.US](https://longbridge.com/en/quote/.NDX.US.md) - [DELL.US](https://longbridge.com/en/quote/DELL.US.md) - [SMCI.US](https://longbridge.com/en/quote/SMCI.US.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [ORCL-D.US](https://longbridge.com/en/quote/ORCL-D.US.md) ## Related News & Research - [Oracle Earnings Seen Testing AI Growth Story](https://longbridge.com/en/news/289360475.md) - [Oracle's AI spending for 2026 exceeds forecast, raising worries over growing debt](https://longbridge.com/en/news/289379200.md) - [Oracle Earnings Preview – High Implied Volatility Speaks Volumes](https://longbridge.com/en/news/289096646.md) - [Oracle faces pivotal Q4 earnings with AI growth in focus](https://longbridge.com/en/news/289265936.md) - [Oracle (ORCL) Q2 Earnings Report Preview: What To Look For](https://longbridge.com/en/news/289129112.md)