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 obligation, a measure of contracted revenue that has not yet been recognized, now stands at $455 billion, up some 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 (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.

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.

Oracle's 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, according to the statement. That would suggest 77% growth from the roughly $10 billion total in fiscal 2025. The company called for the sum to reach $32 billion, $73 billion, $114 billion and $144 billion in 2027, 2028, 2029 and 2030 fiscal 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 in the past 12 months. Market leader Amazon's cloud revenue in the same period approached $112 billion.

With respect to guidance, Oracle called for $1.61 to $1.65 in adjusted earnings per share in the fiscal second quarter, with 14% to 16% revenue growth. Analysts were looking for $1.62 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 a conference call with analysts.

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.

This is developing news. Please check back for updates.

— CNBC's Ari Levy contributed to this report

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