Oracle shares rise 8 percent on raised 2027 revenue outlook

Oracle Corporation projected on Tuesday that the ongoing surge in artificial intelligence data center demand will drive its revenue beyond market expectations through 2027. This optimistic outlook triggered an 8% rise in the company's shares during extended trading, effectively easing market concerns regarding the profitability of its multi-billion dollar investments in AI infrastructure. A critical metric for future contracted revenue, remaining performance obligations (RPO), skyrocketed 325% compared to the previous year, reaching $553 billion. This figure surpassed the $540.37 billion anticipated by analysts. The company noted that the bulk of this RPO growth stems from massive AI contracts, which are expected to be fulfilled without the need for additional incremental funding. Consequently, the enterprise raised its fiscal 2027 revenue target to $90 billion, up from the previous analyst consensus of $86.6 billion. > "Oracle's quarter is a beat and a stress test result for the AI trade," said eMarketer analyst Jacob Bourne. Bourne further observed that as a major player with significant debt exposure in the AI infrastructure space, the company's performance serves as a vital indicator of the broader health of AI spending beyond the hype. Historically recognized for its database software and enterprise applications, the firm has successfully pivoted to become a formidable cloud infrastructure competitor. It is currently expanding its cloud footprint to accommodate generative AI workloads, directly challenging industry leaders such as Amazon.com, Inc. and Microsoft Corporation. In addition to infrastructure expansion, the company is leveraging AI internally. It has begun restructuring its product development divisions, utilizing new AI-driven code generation tools to build software more efficiently with smaller teams. This operational shift comes as the company reports total quarterly revenue of $17.19 billion, exceeding the $16.91 billion estimated by analysts in the United States. Looking ahead to the fiscal fourth quarter, the technology giant anticipates adjusted profits to land between $1.96 and $2.00 per share. Revenue growth for the period is projected at 19% to 21%, while cloud-specific revenue is expected to climb by 46% to 50%. These forecasts, reported from locations including Mexico, align closely with broader industry expectations for continued digital transformation.