Oracle Shares Climb After 30% Revenue Growth on AI Cloud Demand

Oracle's stock rose in premarket trading Friday after the company reported 30% revenue growth in its fiscal first quarter, powered by strong demand for cloud services and rapid data center expansion.

Total first-quarter revenue reached $19.35 billion, beating LSEG consensus estimates of $19.14 billion. Net income hit $4.7 billion, up 60% from $2.93 billion a year earlier. Cloud revenue climbed 62% to $11.6 billion, with cloud infrastructure revenue jumping 121% and cloud application revenue growing 10%.

The company added 850 megawatts of data center capacity during the quarter, booked over $30 billion in additional AI cloud contracts, and delivered more than 300,000 GPUs to AI Cloud customers.

Oracle expects second-quarter revenue growth of 30% to 34%, with cloud revenue rising 64% to 70%. It projects total revenue for fiscal 2027 of at least $90 billion.

To fund its AI data center buildout, Oracle has taken on more than $100 billion in debt. The investment is expected to expand capacity for contracted cloud demand from customers including Nvidia, Meta, OpenAI, AMD and xAI.

Citi analysts reiterated their Buy rating, saying Oracle met expectations and "cleared the runway" for its upcoming Investor Day. They described the 2027 outlook as "modest" and management's framework as "conservative," adding that the quarter's outperformance sets up favorable conditions for upward revisions at Investor Day and AI World.

Oracle shares were last up 7.6% in premarket trading, though the stock has declined 21.5% since the start of the year.

Source: CNBC