Oracle shares jumped 27% in extended trading on Tuesday after the company projected strong cloud growth. The rally came even though its earnings and revenue for the quarter missed Wall Street estimates.
For the quarter ending August 31, Oracle reported adjusted earnings of $1.47 per share. Analysts polled by LSEG had expected $1.48 per share. Revenue reached $14.93 billion, slightly below the $15.04 billion forecast.
Compared with the same period last year, revenue grew 12%, up from $13.3 billion. Net income held steady at $2.93 billion, or $1.01 per share, nearly the same as last year’s $1.03 per share.
The results showed slower earnings growth, but investors focused on the company’s cloud momentum and future contracts.
Oracle said its remaining performance obligations (RPO), which measure contracted revenue yet to be recognized, surged to $455 billion. That represents a massive 359% increase from the prior year.
Part of this boost came from new agreements. OpenAI signed a deal with Oracle to develop 4.5 gigawatts of U.S. data center capacity, underscoring Oracle’s role in artificial intelligence infrastructure.
CEO Safra Catz revealed that Oracle signed four multibillion-dollar cloud contracts during the quarter with three separate customers. The deals signal that large enterprises are increasingly turning to Oracle for cloud infrastructure.
The company also announced that Google’s Gemini AI models will soon be available on Oracle Cloud. This collaboration further strengthens Oracle’s position in the AI space, alongside rivals like Microsoft and Amazon.
Oracle stock hit a record high last month and is up 45% in 2025 so far. By comparison, the S&P 500 index has gained 11% this year.
If Wednesday trading delivers gains of 22% or more, it would mark Oracle’s strongest day since 1999, during the dot-com boom. Such a rally would also push its market capitalization beyond $800 billion.
Oracle co-founder and chairman Larry Ellison said the company will launch a new Oracle AI Database service in October. The service will allow businesses to run AI models from OpenAI and other providers on data stored in Oracle databases.
Ellison emphasized the strategic importance of AI, noting that Oracle is now dealing directly with CEOs and even heads of state on AI-related matters.
In August, Oracle also integrated OpenAI’s GPT-5 model into its cloud applications, deepening its role in the AI ecosystem.
Oracle’s cloud infrastructure revenue rose 55% from last year, reaching $3.3 billion for the quarter. The previous quarter showed growth of 52%, highlighting accelerating demand.
The company now expects $18 billion in cloud infrastructure revenue for fiscal 2026. That represents 77% growth from around $10 billion in fiscal 2025. Looking ahead, Oracle projects revenue to climb to $32 billion, $73 billion, $114 billion, and $144 billion over the following four years.
These ambitious forecasts exceed expectations from some analysts. Evercore analyst Kirk Materne had estimated $108 billion in cloud infrastructure revenue by fiscal 2029, well below Oracle’s target.
Oracle is competing with industry giants Microsoft and Amazon in the cloud market. Microsoft reported $75 billion in Azure cloud revenue over the past 12 months, while Amazon’s cloud division approached $112 billion.
Despite being smaller, Oracle is benefiting from AI-related demand and its access to Nvidia GPUs, which are critical for running large-scale workloads.
For the fiscal second quarter, Oracle expects adjusted earnings per share between $1.61 and $1.65. Revenue growth is projected at 14% to 16%. Analysts had forecast $1.62 per share on $16.21 billion in revenue, or 15% growth.
The company also announced capital expenditures of about $35 billion for the new fiscal year, a 65% increase. CEO Safra Catz said Oracle prefers a lighter approach to owning assets compared with rivals that focus heavily on physical infrastructure.
Oracle’s rise highlights how cloud and AI are shaping the tech world. Read more in our feature on the future beyond smartphones.
