Oracle reported fiscal first-quarter revenue of $19.35 billion, up nearly 30% year over year, beating LSEG consensus estimates of $19.14 billion3,7. Cloud infrastructure revenue more than doubled, jumping 121% to $7.4 billion against estimates of $7.09 billion8,4. The quarter ended on August 31.
Adjusted earnings came in at $1.92 per share, well ahead of the $1.74 Wall Street expected. Net income reached $4.68 billion, or $1.56 per share, up 60% from $2.93 billion a year earlier.
AI demand and data center buildout
Total cloud revenue rose 62% to $11.61 billion, while cloud application revenue grew 10%. Oracle booked more than $30 billion of new AI cloud contracts during the quarter. Remaining performance obligations reached $664 billion, up $209 billion year over year.
Oracle said "customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply". The company brought 850 megawatts of additional data center capacity online during the quarter and delivered more than 300,000 GPUs to AI cloud customers. Its data center buildout is expected to expand capacity for contracted cloud demand from customers including Nvidia, Meta, OpenAI, AMD, and xAI. Oracle has taken on more than $100 billion in debt to fund the expansion.
Oracle also obtained a Pentagon contract worth up to $7 billion over a decade.
Guidance and market reaction
For the fiscal second quarter, Oracle guided adjusted earnings per share of $1.85 to $1.93, with revenue growth between 30% and 34%. The company expects cloud revenue to rise between 64% and 70% in the period. For the full 2027 fiscal year, Oracle projects at least $90 billion in total revenue and $8.10 in adjusted earnings per share.
Shares jumped as much as 7% in extended trading on Thursday, though the stock has declined 21.5% since the beginning of the year.
Analyst reactions were broadly positive. Citi rated Oracle Buy with a $330 price target, and Bernstein set a $325 target at Outperform. Deutsche Bank assigned a $300 target at Buy, while Wells Fargo set $280 at Overweight. Morgan Stanley maintained an Equal Weight rating with a $210 target, calling the quarter "a near-term proof point" on infrastructure.
ANALYSIS The 121% cloud infrastructure growth rate, combined with $30 billion in new AI contracts in a single quarter, positions Oracle's cloud business as the dominant revenue engine, far outpacing the 10% growth in cloud applications and a roughly 3% decline in the legacy software category. The $664 billion in remaining performance obligations, backed by more than $100 billion in debt, represents a concentrated bet on sustained AI infrastructure demand from a named customer base that includes several of the largest model developers.