Sticky inflation and high borrowing costs have forced firms to cut back on expenditure, hurting firms like Oracle that depend on enterprise spending.

The cloud-based software maker reported second-quarter revenue of $12.94 billion, below analysts' average estimate of $13.05 billion, according to LSEG data.

In October, Google-parent Alphabet also reported the slowest growth in its cloud division in at least 11 quarters, raising concerns about the demand environment.

While Oracle has been working to bolster its AI infrastructure as firms look to adopt generative AI, frontrunners Amazon and Microsoft continue to dominate the market.

Larger players have already made deep inroads in the AI ecosystem, limiting opportunities for Oracle to gain a sizeable market share.

In October, Microsoft beat Wall Street estimates for first-quarter results across all segments, with its artificial-intelligence offerings propelling growth in the cloud computing segment.

Oracle reported an adjusted net income of $3.76 billion for the second quarter, marginally beating Street estimates of $3.74 billion.

On an adjusted basis, Oracle reported earnings of $1.34 per share for the quarter ended Nov. 30, compared with estimates of a profit of $1.32 per share.