ORACLE reported slowing quarterly sales growth in its cloud computing business, fuelling investor fears that the software maker’s expansion efforts have yet to gain ground the competitive market. The shares fell about 8 per cent in extended trading.

Cloud revenue jumped 25 per cent to US$4.8 billion in the period ended Nov 30, the company said on Monday (Dec 11). Of that, US$1.6 billion came from renting out computing power and storage over the Internet and US$3.2 billion from applications. It was the second consecutive quarter of slowing growth for the business.

The Austin-based company, known for its database software, is focused on expanding its cloud infrastructure business to more forcefully compete with Amazon.com, Microsoft and Alphabet’s Google. That initiative hit a snag last quarter when Oracle reported its first infrastructure growth slowdown after more than a year of acceleration. Future gains will hinge not just on customer demand, but the availability of graphics processors used in data centres to power artificial intelligence workloads, wrote Siti Panigrahi, an analyst at Mizuho, ahead of the results.

The shares dropped to a low of US$104.80 in extended trading after closing at US$115.13 in New York. The stock has gained 41 per cent this year, lagging behind the iShares Expanded Tech-Software Sector ETF rally of 55 per cent.

Fiscal second-quarter sales increased 5 per cent to US$12.9 billion. Analysts, on average, estimated US$13.1 billion, according to data compiled by Bloomberg. Profit, excluding some items, was US$1.34 a share, compared with the average estimate of US$1.33. BLOOMBERG