Oracle stock surged in Tuesday's afterhours trade, after the Silicon Valley stalwart reported quarterly results that topped Street forecasts and lifted its fiscal 2027 revenue outlook.
At $162.40, Oracle shares were up $13 or 8.7% in after-hours trading, after the numbers impressed investors, with the Tech Giant telling investors that its performance was driven by an acceleration in cloud and artificial intelligence infrastructure demand.
The quarter shows Oracle’s pivot toward AI cloud services is reshaping revenue and spending patterns, and it bolsters sentiments previously weighed by investor scrutiny over data-center investments and prior cash flow metric.
Oracle posted adjusted earnings per share of $1.79 for the quarter, versus analyst consensus of $1.70, whilst at $17.19 billion revenue exceeded the market expecation for $16.91 billion. Total revenue rose 22% year over year and net income increased to $3.72 billion, or $1.27 a share, from $2.94 billion, or $1.02 a share, a year earlier.
Cloud revenue, including infrastructure and software-as-a-service, reached $8.9 billion, up 44%, and cloud infrastructure revenue was $4.9 billion, up 84%.
Oracle told investors that its growth is being driven mostly by large scale AI contracts, boosted by the fact that Oracle does not expect to have to raise any incremental funds to support these contracts - as most of the equipment needed is either funded upfront via customer prepayments, meaning Oracle can purchase the GPUs without going into its own coffers, or the customers are sourcing and supplying the GPUs to Oracle.
Management raised fiscal 2027 revenue guidance by $1 billion to $90 billion, above LSEG’s $86.6 billion consensus.
Oracle, meanwhile, noted it plans to raise $45 billion to $50 billion this fiscal year to expand cloud infrastructure and is planning for more than 10 gigawatts of computing power coming online over the next three years, supporting a pipeline that includes servicing the likes of Air France-KLM, Lockheed Martin, SoftBank and Activision Blizzard.
The recap
Oracle beat fiscal third-quarter revenue and EPS estimates.
Cloud revenue rose 44% to $8.9 billion in quarter.
Company plans $45 billion to $50 billion infrastructure funding.