Oracle pops 27% on cloud growth projections even as earnings miss estimates

Oracle shares spiked 27% in extended trading on Tuesday after the database software maker indicated hefty growth prospects due to new cloud contracts, even as earnings and revenue missed estimates.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: $1.47 adjusted vs. $1.48 expected
• Revenue: $14.93 billion vs. $15.04 billion expected

Revenue increased 12% from $13.3 billion a year earlier during the quarter, which ended on Aug. 31, according to a statement. Net income was about flat at $2.93 billion, or $1.01 per share, compared to $2.93 billion, or $1.03 per share, in the same quarter last year.

Oracle said its remaining performance obligations, a measure of contracted revenue that has not yet been recognized, soared to $455 billion, up 359% from a year earlier. During the quarter, OpenAI said it signed an agreement with Oracle to develop 4.5 gigawatts of U.S. data center capacity.

Alongside larger cloud providers such as Microsoft, Oracle has been one of the big winners of the artificial intelligence boom, due to its cloud infrastructure business and its access to Nvidia’s graphics processing units, or GPUs, needed for large workloads. CEO Safra Catz said in the statement that the company signed four multibillion-dollar contracts with three different customers in the quarter.

Also in the quarter, Oracle said cloud rival Google’s Gemini AI models would become available on Oracle’s cloud infrastructure.

Oracle shares hit a record last month and are up 45% in 2025 as of Tuesday’s close, while the S&P 500 index has gained 11%.

A gain of 22% or better on Wednesday would represent the best day for the stock since the dot-com boom of 1999 and its third-sharpest rally ever. It would also lift the company’s market cap past $800 billion.

In the statement, Larry Ellison, Oracle’s co-founder, chairman and technology chief, said that in October, the company will bring out an Oracle AI Database service that will allow for running AI models from OpenAI and other companies atop client data stored in Oracle databases. The effort would deepen Oracle’s product integration with OpenAI. In August, Oracle said it has brought OpenAI’s new GPT-5 AI model to its cloud applications.

“Historically, we don’t deal with CEOs. Now we deal with CEOs,” Ellison said on a conference call with analysts. He also said he’s dealing directly with heads of state, “because AI is so important.”

Oracle generated $3.3 billion in revenue from cloud infrastructure, up 55% from a year earlier. The growth rate was 52% in the fiscal fourth quarter.

According to the statement, Oracle now sees $18 billion in cloud infrastructure revenue in the 2026 fiscal year. That would suggest 77% growth from the roughly $10 billion total in fiscal 2025. The company called for the annual sum to reach $32 billion, $73 billion, $114 billion and $144 billion over the subsequent four years.

Kirk Materne, an Evercore analyst with the equivalent of a buy rating on Oracle stock, said in a note to clients that he had anticipated $108 billion in fiscal 2029 cloud infrastructure revenue.

In July, Microsoft said it produced $75 billion in revenue from its Azure cloud infrastructure over the past 12 months. Amazon’s cloud revenue during the same period approached $112 billion.

For the fiscal second quarter, Oracle called for $1.61 to $1.65 in adjusted earnings per share, with 14% to 16% revenue growth. Analysts were looking for $1.62 in earnings per share on $16.21 billion in revenue, which implies 15% growth.

Capital expenditures for the new fiscal year will be around $35 billion, representing 65% growth, Catz said on the earnings call. Microsoft and other cloud incumbents are accustomed to allocating more for property and equipment for their build-outs.

“This is, in some ways, I don’t want to call it asset-light, like from the finance world, but it’s asset-pretty-light, and that is really an incentive for us,” Catz said. “I know some of our competitors, they like to own buildings. That’s not really our specialty.”

— CNBC’s Ari Levy contributed to this report.