Oracle Corp.’s latest earnings report has triggered a historic day for the company and its stock, fueled by unprecedented demand for its cloud services, particularly from the artificial intelligence sector. While the reported earnings per share of $1.47 slightly missed some analyst estimates, and total revenue of $14.9 billion was a modest 12% increase year-over-year, these figures were completely overshadowed by the company’s bold future projections and massive contract backlog. The company announced its remaining performance obligations (RPO)—a measure of future contracted revenue—skyrocketed by 359% to $455 billion, with executives stating they expect it to exceed half a trillion dollars soon. This massive backlog, which reportedly includes a significant five-year, multi-billion-dollar deal with OpenAI, has instilled extreme confidence in investors about Oracle’s long-term growth.
The market’s reaction was nothing short of explosive. On Wednesday, following the earnings release, Oracle’s stock (ORCL) surged over 40%, marking its largest single-day gain since 1992, landing at a 36% increase. This meteoric rise propelled the company’s market valuation to nearly $1 trillion. The rally also had a profound effect on the personal wealth of Oracle’s co-founder and chairman, Larry Ellison, whose net worth soared by more than $100 billion in a single day, temporarily making him the world’s richest person, surpassing Elon Musk.
A key driver of this optimism is Oracle’s strategic pivot to becoming a central player in the AI infrastructure race. The company’s management projected that its Oracle Cloud Infrastructure (OCI) revenue will grow a staggering 77% to $18 billion this fiscal year and reach $144 billion annually over the next four years. This aggressive forecast, which executives noted is largely backed by the reported RPO, is a significant re-rating of Oracle’s business model from a legacy enterprise software company to a high-growth AI powerhouse. Analysts from firms like Deutsche Bank and Citi have called the results “truly historic” and have rapidly raised their price targets on the stock.
Oracle’s success is not happening in a vacuum; its earnings report has sent a ripple effect through the entire AI-related market. The strong signals of sustained AI spending boosted shares of other companies in the sector, including AI chip giants like Nvidia and Broadcom. This performance has validated the widespread belief that the AI spending boom has significant room to run, lifting the entire PHLX Semiconductor Index.
