Oracle Corp. (NYSE: ORCL) shares surged in extended trading after the enterprise software giant reported fiscal third-quarter results that topped Wall Street expectations and raised its long-term revenue outlook, signaling growing momentum in its cloud and artificial intelligence infrastructure business.
The stock jumped about 11.44% to roughly $166 in overnight trading after closing near $149.40. The sharp move offered a boost for investors after a difficult stretch for the stock, which had fallen sharply from its September high of $345.72 and remains down about 54% over the past six months.
Oracle beats Q3 earnings expectations
Oracle reported earnings per share of $1.79 on revenue of $17.19 billion for the quarter, beating analyst expectations of $1.70 EPS and $16.9 billion in revenue. The results also marked strong growth compared with the same period last year, when the company reported earnings of $1.47 per share on revenue of $14.1 billion.
The earnings beat helped reassure investors that Oracle’s aggressive expansion into cloud infrastructure and artificial intelligence services is beginning to translate into tangible financial performance.
Cloud and AI infrastructure drive growth
Oracle’s cloud segment continued to be the company’s main growth driver during the quarter. Cloud revenue came in at $8.9 billion, slightly ahead of analyst estimates of $8.8 billion.
Within that segment, cloud infrastructure revenue reached $4.9 billion, also exceeding forecasts of $4.74 billion. The infrastructure business is closely tied to demand for AI workloads, model training, and enterprise applications running on high-performance data centers.
The growth reflects rising demand from companies developing generative AI tools and large-scale machine learning models that require powerful computing resources.
Oracle raises long-term revenue outlook
One of the biggest catalysts behind the stock surge was Oracle’s decision to raise its fiscal 2027 revenue outlook to $90 billion. The projection exceeds Wall Street estimates of roughly $86.6 billion, according to data compiled by LSEG.
The updated forecast suggests Oracle expects strong long-term demand for its cloud infrastructure platform as companies increasingly adopt AI technologies and move critical workloads to the cloud.
Oracle also reported that remaining performance obligations, a key measure of future contracted revenue, jumped 325% year over year to $553 billion. That figure surpassed the $540.37 billion estimate from analysts tracked by Visible Alpha.
According to the company, most of the increase in backlog is tied to large-scale artificial intelligence contracts. Oracle added that it does not expect to raise additional funds related to these deals.
Heavy spending on AI data centers
The earnings report comes as Oracle significantly increases investment in AI infrastructure. Capital expenditures surged as much as 269% earlier in the fiscal year, reaching about $8.5 billion in the first quarter alone.
The company now expects total capital expenditures to reach roughly $50 billion for the full year as it continues building data centers to support growing demand for AI computing.
That spending spree has raised concerns among some investors who worry that massive infrastructure investments across the technology industry could take years to generate meaningful returns.
Data center expansion reports and layoffs
The earnings announcement also arrives amid reports surrounding Oracle’s AI data center expansion plans. Bloomberg previously reported that Oracle and OpenAI had canceled plans to expand a Stargate data center project in Texas, which potentially opened the door for Meta Platforms to explore leasing the location with developer Crusoe.
Oracle pushed back against those claims in a statement posted on social media, saying the reports were inaccurate. The company said construction of its AI data center campus in Abilene, Texas, is progressing rapidly, with two buildings already operational and additional facilities on track.
The company also confirmed it has secured leasing for an additional 4.5 gigawatts of capacity to meet its commitments to OpenAI.
Separately, Bloomberg reported that Oracle may lay off thousands of employees as part of an effort to fund its massive data center build-out.
AI spending across Big Tech rises
Oracle’s investment strategy reflects a broader trend across the technology sector as companies race to build infrastructure capable of supporting AI workloads.
Amazon, Microsoft, Google, and Meta are collectively expected to spend around $650 billion on capital expenditures in 2026, with much of that funding directed toward AI data centers and computing infrastructure.
However, investors have become increasingly cautious about the scale of those investments. Microsoft shares are down about 16% this year, while Amazon has declined more than 7%. Google and Meta have also posted modest losses during the same period.
Analysts remain optimistic
Despite recent volatility in Oracle’s stock price, analysts remain broadly optimistic about the company’s position in the cloud computing market.
Scotiabank recently lowered its price target on Oracle slightly to $215 from $220 but maintained an outperform rating on the stock. Analysts said they view Oracle’s position as the fourth-largest player in the AI-accelerated cloud market as a strong competitive advantage.
The firm also noted that Oracle’s traditional enterprise software business remains well insulated from emerging competition.
Outlook for Oracle stock
Oracle’s strong earnings beat, rising cloud revenue, and massive pipeline of AI contracts helped drive one of the company’s biggest post-earnings stock moves in recent years.
While the stock remains far below its previous highs, the latest results suggest that Oracle’s bet on artificial intelligence infrastructure could become a key driver of long-term growth.
Investors will likely continue watching cloud infrastructure growth and capital spending closely as Oracle expands its data center footprint worldwide. For now, the company’s latest report has provided a strong reminder that demand for AI-powered cloud services continues to accelerate.
Investors can track the latest Oracle stock performance on Yahoo Finance or view company updates through Oracle’s investor relations page.
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