Oracle (ORCL) stock fell late Wednesday after the tech giant reported mixed fiscal second-quarter results. Shares of the enterprise database stalwart have been on a wild ride in recent months as investors debate the risks and rewards of its expensive AI push.

Oracle said that it earned an adjusted $2.26 per share for the November-ended quarter, up 54% from a year earlier. That beat the $1.64 that analysts polled by FactSet were forecasting. Sales increased 14% to $16.1 billion, just beneath analyst estimates of $16.2 billion. Earnings were helped by a $2.7 billion pretax gain, the company said, from the sale of Oracle's stake in chip-design company Ampere to SoftBank earlier this year.

Meanwhile, Oracle's cloud infrastructure revenue grew 68% to $4.1 billion. Cloud infrastructure revenue grew 55% in Oracle's August-ended Q1 and 52% in the May-ended fiscal Q4. Oracle Cloud Infrastructure is a fast-growing challenger to larger rivals Amazon (AMZN), Microsoft (MSFT) and Google parent Alphabet (GOOGL) that rent cloud computing services to enterprises. It also key to the company's broader effort to be a major AI player.

Prior to the report, Jefferies analyst Brent Thill said in a client note that Wall Street is looking for cloud infrastructure revenue growth of 74% from Oracle's fiscal Q2.

On the stock market today, Oracle stock tumbled more than 6% to 207.70 in after-hours trades.

Oracle's Costly AI Push

Oracle said that remaining performance obligations — contracted revenue not yet recognized — grew 438% year over year to $523 billion. Oracle stock soared in September after it reported that RPO grew 359% to $455 billion during its August-ended quarter.

However, Oracle's stock has been beaten down since October by concerns about the huge costs required to meet that demand, as well as the company's reliance on ChatGPT creator OpenAI as a top customer. The ChatGPT has committed to spending more than $300 billion on Oracle cloud services over the next five years and committed to more than $1 trillion total in cloud spending across Microsoft, Oracle, Google, Amazon and others.

Oracle offered a defense of its ability to effectively scale up data centers and meet demand for cloud infrastructure.

"Oracle is very good at building and running high-performance and cost-efficient cloud datacenters," Chief Executive Clay Magouyrk said in the news release. "For years Oracle has been investing in AI and building autonomous cloud software. Oracle's Autonomous Database and Autonomous Linux have been key to reducing human labor and human error in our datacenters. Because our datacenters are highly automated, we can build and run more of them. Oracle has over 211 live and planned (in) regions worldwide — more than any of our cloud competitors."

Investors will be listening for the company's guidance, which is usually gives during a call with analysts. The conference call was scheduled for 5 p.m. Eastern.

Oracle Stock Near 21-Day Line

Oracle stock gained a fraction in regular trading Wednesday, giving it a streak of seven days with gains. The stock is hovering just above Oracle's 21-day moving average. Shares closed ahead of that short-term support level on Monday for the first time since mid-October.

Oracle stock remains ahead 33% year to date but is down more than 35% from its record high in September.

Meanwhile, Oracle stock holds an IBD Composite Rating of 71 out of 99, according to IBD Stock Checkup. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.

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