AI cloud momentum drives stock to post-market record
Oracle shares soared 27% in after-hours trading Tuesday following strong signals of future growth tied to major cloud infrastructure deals, even as the company missed Wall Street’s earnings and revenue expectations for the fiscal first quarter ended August 31.
The software giant reported adjusted earnings per share of $1.47, narrowly missing the $1.48 expected by analysts polled by LSEG. Revenue came in at $14.93 billion, below the $15.04 billion forecast. Still, revenue grew 12% year-over-year from $13.3 billion, while net income held steady at $2.93 billion, or $1.01 per share.
Massive contracts signal long-term cloud growth
Investors reacted positively to Oracle’s announcement that its remaining performance obligation — a measure of contracted but not yet recognized revenue — has ballooned to $455 billion, up a staggering 359% from a year earlier. Among the highlights was a deal with OpenAI to co-develop 4.5 gigawatts of U.S. data center capacity.
CEO Safra Catz said the company signed four multibillion-dollar agreements with three separate clients during the quarter, underlining Oracle’s positioning as a top beneficiary of the ongoing artificial intelligence boom. Oracle’s cloud infrastructure revenue rose 55% to $3.3 billion, accelerating from 52% growth in the prior quarter.
Oracle is now forecasting $18 billion in cloud infrastructure revenue for fiscal 2026, up 77% from $10 billion in fiscal 2025. Longer-term projections include $32 billion in 2027, $73 billion in 2028, $114 billion in 2029, and $144 billion by 2030. Evercore analyst Kirk Materne had estimated $108 billion for fiscal 2029, indicating Oracle’s forecast exceeds expectations.
AI integrations deepen with OpenAI and Google
Oracle continues to build momentum in AI integrations. The company revealed that Google’s Gemini AI models will be available on Oracle’s infrastructure. Co-founder Larry Ellison also announced plans to launch an “Oracle AI Database” in October, enabling clients to run models from OpenAI and others directly on their proprietary data within Oracle systems.
Oracle previously said in August that GPT-5, OpenAI’s latest AI model, is now integrated into its cloud applications. These developments are designed to enhance enterprise adoption of AI by embedding advanced models into data management workflows.
Guidance and spending ramp-up reassure investors
Looking ahead, Oracle projected adjusted earnings per share of $1.61 to $1.65 for the fiscal second quarter, alongside 14% to 16% revenue growth. Analysts were expecting $1.62 on $16.21 billion in revenue, which would represent 15% growth.
Capital expenditures are also set to increase significantly, with Catz projecting $35 billion for the new fiscal year, a 65% jump as the company expands its infrastructure to meet rising demand.
Oracle stock hit a record high last month and has now risen 45% in 2025, far outpacing the S&P 500’s 11% gain year-to-date. If Wednesday’s rally holds, the stock could post its best single-day performance since 1999 and push the company’s market capitalization above $800 billion.
