Oracle Corporation had a great first quarter for its 2027 fiscal year. The company beat Wall Street expectations for both revenue and profit. This happened because businesses are demanding more artificial intelligence (AI) computing power.
Oracle showed a massive $664 billion in future contracts. The company also proved that its expensive new data centers are making money quickly. Because of this good news, Oracle’s stock price went up.
Strong Financial Results
For the quarter ending August 31, 2026, Oracle made $19.35 billion in total revenue. This is a 30 percent increase from last year. It beat the $19.14 billion estimate from experts.
Adjusted earnings were $1.92 per share. This was higher than the $1.74 that analysts expected. Total net income went up 63 percent to $4.76 billion. The company also saw a record $23.10 billion in operating cash flow.
Stock Market Reaction
The stock market reacted very quickly. Before the news, Oracle’s stock had dropped 38 percent from its summer highs because people worried about construction costs.
However, after the regular trading day ended, Oracle shares jumped more than 7 percent. This jump was expected to add about $24 billion to the company’s total market value.
Cloud Growth and Rivals
The biggest reason for Oracle’s success was Oracle Cloud Infrastructure (OCI). OCI provides the heavy computing power needed to train generative AI models.
Sales in this cloud infrastructure area grew by 121 percent compared to last year. It reached $7.4 billion, which easily beat the $7.19 billion estimate.
Comparing to Others
This triple-digit growth is much faster than Oracle’s main rivals. For example, recent cloud growth for Amazon Web Services was 28 percent. Microsoft Azure grew 40 percent, and Google Cloud grew 63 percent.
Oracle’s total cloud revenue, which combines infrastructure and apps, grew 62 percent to $11.6 billion. The cloud business now makes up 60 percent of Oracle’s total revenue.
Older Business Lines
Oracle’s older businesses are slowing down. Software sales fell 3 percent to $5.55 billion. Oracle said this is because customers are leaving older systems for the cloud. Hardware sales did go up 15 percent to $770 million, and services grew 5 percent to $1.41 billion.
| Segment Performance | Q1 FY2027 Revenue | Q1 FY2026 Revenue | Year-Over-Year Change |
| Cloud Infrastructure (IaaS) | $7.39 billion | $3.35 billion | +121% |
| Cloud Applications (SaaS) | $4.22 billion | $3.84 billion | +10% |
| Total Cloud | $11.61 billion | $7.19 billion | +62% |
| Software | $5.55 billion | $5.72 billion | -3% |
| Hardware & Services Combined | $2.18 billion | $2.02 billion | +8% |
Record Sales and New Data Centers
Investors wanted to know if Oracle could secure long-term deals from AI developers. During the quarter, Oracle signed more than $30 billion in new AI cloud contracts.
This pushed its total future revenue backlog to a record $664 billion. Oracle expects about half of this money to turn into real sales in the next 36 months.
The AI Story is Real
“The AI ROI story just got real for Oracle and its customers,” said Rebecca Wettemann, CEO of the research firm Valoir. She added that Oracle needs to show this backlog growth is about more than just OpenAI.
Massive Equipment Upgrades
Oracle is expanding its infrastructure faster than almost anyone else in the tech world. During the first quarter, Oracle turned on 850 megawatts of new data center power. They also delivered over 300,000 AI chips (GPUs) to customers.
The demand is massive. Oracle reported that 97.9 percent of its GPUs are being used. Customers renewing contracts are even paying a 20 percent higher price.
The Stargate Project in Texas
A key part of this expansion is the flagship “Stargate” data center in Abilene, Texas. Oracle co-CEO Clay Magouyrk said OpenAI trained its latest AI model, called Astra, at this location.
This site was built incredibly fast. It went from empty land to a working facility in less than a year. Oracle has already given OpenAI 75 percent of the promised capacity there. When fully finished, this Texas data center will hold more than 450,000 GPUs.
Managing High Costs and Debts
Even with the great sales, Wall Street pays close attention to the high costs of building data centers. Expanding these large sites and buying chips takes a lot of money up front.
Oracle reported $28.5 billion in capital spending for the quarter. This drove its free cash flow down to a negative $5.40 billion. Also, the company’s total debt is around $125 billion. To get more cash, Oracle sold $20 billion worth of stock during the quarter.
Customers Paying in Advance
However, Oracle shared an important detail that made investors feel better. Chief Financial Officer Hilary Maxson explained that $11.36 billion of the quarter’s spending was paid for by customers in advance.
“The vast majority of those orders were via prepay,” Maxson stated. This means Oracle does not have to use its own extra money. Because of this setup, the negative $5.40 billion cash flow was actually much better than the negative $9.56 billion that experts feared.
Lale Akoner, a market expert at eToro, noted that these customer payments help prove that Oracle is not building empty data centers. It eases fears that they are building before there is real demand.
Stock Value and Future Outlook
Even with fast growth, Oracle’s stock is still cheaper than its competitors. Oracle currently trades at 16.86 times its expected future earnings. This is much lower than Microsoft’s 23.84 and Amazon’s 22.58. This means the stock could keep going up.
Oracle’s leaders also showed confidence. They announced a cash dividend of $0.50 per share, which will be paid on October 23, 2026. Some leaders, like Vice Chairman Jeffrey Henley, did sell shares recently. He sold $63.6 million worth of stock, but this is a normal move for executives managing their pay.
Raised Forecasts
Looking ahead, Oracle raised its goals for the full 2027 fiscal year. The company now believes total yearly revenue will reach at least $90 billion, which beats the $89.76 billion estimate. Full-year adjusted earnings are expected to be $8.10 per share, also higher than expected.
For the next quarter, total revenue should grow between 30 and 34 percent. Cloud revenue specifically is expected to grow between 65 and 71 percent.
Management confirmed that total capital spending for the year will stay between $90 billion and $95 billion. However, because customers prepay, Oracle’s actual cash spending will be capped at $70 billion.
Oracle has proven it is a vital part of the artificial intelligence boom. The company continues to grow at incredible speeds while getting customers to help pay for new buildings. This gives Oracle a major advantage in the global cloud market.
Frequently Asked Questions
1. Why did Oracle’s stock price go up recently?
Oracle’s stock price went up because their cloud sales grew very quickly. They secured over $30 billion in new artificial intelligence contracts, which impressed investors and showed strong future demand.
2. How fast is Oracle’s cloud business growing compared to others?
Oracle’s cloud infrastructure business grew by 121 percent. This is much faster than its main rivals. For comparison, Amazon Web Services grew at 28 percent, Microsoft Azure at 40 percent, and Google Cloud at 63 percent.
3. Is Oracle spending too much money on its AI data centers?
Oracle is spending a large amount, hitting $28.5 billion this past quarter. However, customers paid for $11.36 billion of that upfront. This advance payment method helps protect Oracle from taking on too much debt.
4. What is the Stargate project mentioned in the news?
The Stargate project is a massive new data center located in Abilene, Texas. It was built very quickly, and OpenAI used it to train their new Astra AI model.
5. How much total money did Oracle make this quarter?
Oracle made $19.35 billion in total sales for the first quarter of fiscal 2027. This was a 30 percent increase compared to the same time last year.
