Oracle shares surged more than 25% in after-hours trading following the company’s announcement that its AI-powered cloud business is projected to grow dramatically over the next five years. The software giant expects its AI-driven cloud revenue to rise to $144 billion by its 2030 fiscal year, a significant jump from the current forecast of under $20 billion for this fiscal year.
CEO Safra Catz outlined ambitious growth targets during the earnings call, stating, “We expect Oracle Cloud Infrastructure revenue to grow 77% to $18 billion this fiscal year — and then increase to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years.” This forecast reflects Oracle’s aggressive expansion in cloud computing services, especially those powered by artificial intelligence.
Despite the optimistic outlook, Oracle shares dipped briefly as the company’sreported earnings for the first quarter of fiscal 2026 fell slightly below analyst expectations. The company reported $14.9 billion in revenue, just shy of the anticipated $15 billion, and adjusted earnings per share of $1.47 compared to a projected $1.48. Nevertheless, investor sentiment turned positive following the company’s future growth projections.
Contract Backlog and Key Partnerships
A major highlight of Oracle’s report was the dramatic increase in its contract backlog, known as Remaining Performance Obligation (RPO). The total value of future contract revenue rose 359% to $455 billion in the first quarter. The company expects this figure to exceed $500 billion as additional large contracts are signed.
Oracle revealed it secured four multibillion-dollar deals with three customers during the quarter, contributing to this surge. Catz added, “We have signed significant cloud contracts with the who’s who of AI, including OpenAI, xAI, Meta, and many others.”
These partnerships position Oracle as a competitive force in the cloud infrastructure space, rivalling industry leaders like Amazon Web Services and Google Cloud. The company’s ability to access Nvidia’s high-performance GPUs has played a pivotal role in enabling AI-driven services, further strengthening its cloud offerings.
Increased Capital Investment
Oracle shares reflect the company’s aggressive push into AI-driven cloud services is backed by significant capital investments. The company raised its capital expenditure forecast to approximately $35 billion for fiscal 2026, up from an earlier estimate of $25 billion and $21 billion in the previous year. These investments are focused on expanding data center infrastructure, which supports both existing cloud services and the development of new AI-powered solutions.
The company’s ability to attract large-scale customers and invest heavily in infrastructure has contributed to a remarkable 70% increase in its stock price over the past year.
Looking Ahead
Oracle’s growth strategy centers on leveraging AI capabilities to expand its cloud infrastructure offerings and attract enterprise clients. While its quarterly earnings fell short of Wall Street’s expectations, its long-term outlook has generated excitement among investors.
The company’s role in large-scale AI infrastructure projects, such as its partnership with OpenAI on the Stargate initiative, further underscores its commitment to advancing cloud technologies. Although some details remain under development, Oracle shares continues to strengthen its presence in the AI and cloud computing sectors.
For entrepreneurs and business owners, Oracle’s latest announcements —and the surge in Oracle shares— highlight the growing importance of AI-enabled cloud solutions in scaling operations and supporting digital transformation. As cloud computing becomes an integral part of enterprise strategies, Oracle’s investments and partnerships signal robust opportunities for businesses looking to harness the power of AI-driven infrastructure.
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