Oracle’s Q2 Cloud Revenue Expected to Grow Amid AI Debt Scrutiny

In Focus

• Oracle’s Q2 earnings report is expected on December 11, 2025
• Analysts expect the company’s total revenue to grow 15% year-on-year
• Investors are concerned by Oracle’s rising debt and dependence on AI

Oracle will report Q2 earnings on December 11, 2025, amidst concerns over its reliance on OpenAI and its debt-driven data center build out. According to Yahoo Finance, investors will be looking out for signs of cracks in the company’s results as part of Oracle’s AI debt scrutiny in 2025.

Oracle’s Cloud Revenue Expected to Grow

Analysts expect revenue from Oracle’s cloud infrastructure revenue to grow in 2025. In the second-quarter, revenue from the company’s cloud unit, which competes against Google Cloud, Microsoft’s Azure, and Amazon’s AWS, is expected to grow by 68% to about $4.1 billion. In its first-quarter of the 2026 fiscal year, Microsoft reported a 40% cloud revenue surge even as its capital spending exceeded investor expectations.

Oracle’s total Q2 revenue is expected to grow by 15% from the same period last year to about $16.21 billion. On September 10, 2025, Oracle stock surged about 29% after the tech giant forecasted that its cloud business could generate over $500 billion in coming months. The majority of this revenue was expected to come from OpenAI after the two companies signed a $300 billion cloud computing deal.

However, share prices dipped following Oracle’s reliance on OpenAI to realize its revenue targets created discomfort among investors. Over time, investors have become skeptical due to the fact that OpenAI has taken on costs that far outweigh its projected revenue. Earlier this year, the AI firm collaborated with Oracle and SoftBank to build five new Stargate data centers across the U.S.

How Much Debt has Oracle Taken to Build AI Data Centers?

As Oracle’s OpenAI reliance comes under scrutiny, investors will be focusing on the company’s rising debt to finance data center projects. Last quarter, Oracle’s debt amounted to about $105 billion.

This year, the software company has issued close to $25.8 billion in corporate bonds. Investors have been alarmed by Oracle’s growing debt portfolio, which is driven by AI infrastructure spending and dependent on speculative returns.

Investors will also be scrutinizing Oracle’s participation in multibillion-dollar circular financing deals, which continue to push tech valuations up in ways that fundamentals do not justify.

Oracle’s Debt Vs. Expenses

Oracle’s debt has been growing amid rising expenses, with its first-quarter capital expenditure reaching $8.5 billion, up from $2.3 billion a year earlier. But some analysts think the company is still on the right path as long as its cloud revenue continues to grow.

“Ultimately, we view this as a trade-off for potential revenue growth in the longer term. We believe investor sentiment may remain positive as long as Oracle Cloud Infrastructure growth continues to outpace that of the major hyperscalers,” JPMorgan analyst Mark Murphy said as stated by Yahoo Finance.

Compared to peers like Meta, Alphabet, and Amazon, investors perceive Oracle’s debt as riskier. Data from Intercontinental Exchange (ICE) shows that the cost of protecting Oracle’s debt from a possible default has risen to its highest level since 2009.

The software giant is expected to report $1.64 in earnings per share in its second-quarter, compared to $1.47 reported in the same period last year.