Revenue at Oracle's key division rose 84%. Shares soared 9%

Cloud computing vendor Oracle's AI infrastructure revenue nearly doubled in the quarter and was above market expectations, and the company gave a strong sales outlook for the next fiscal year. That's a signal that Oracle is starting to turn its huge AI infrastructure order book into real revenue, Bloomberg notes. Oracle shares jumped more than 9% in extended trading on March 10 after the reports were released.

Revenue from Oracle's key infrastructure segment, which is particularly closely watched by investors, increased 84% to $4.9 billion in the third quarter of the fiscal year ended Feb. 28. Analysts were expecting a 79% increase, Bloomberg reported. In addition, the growth rate accelerated compared with 68% in the previous quarter.

Oracle is now executing large-scale cloud infrastructure contracts for OpenAI and Meta Platforms, as well as building new capacity. Oracle's remaining performance obligation (RPO) - the volume of orders for which revenue has not yet been recorded - reached $553 billion versus $523 billion a quarter earlier. The company noted that its cloud services are used by Air France-KLM, Lockheed Martin, SoftBank and Microsoft-owned Activision Blizzard's gaming division.

The results, which exceeded expectations on most metrics, may at least temporarily reassure investors: the reporting and order book point to a continued surge in demand for AI infrastructure, CNBC said.

Oracle said revenue in fiscal 2027, which starts in June, will reach $90 billion, raising its previous forecast by $1 billion. Analysts' consensus forecast was for $86.7 billion, Bloomberg wrote.

Oracle shares rose more than 9% in extended trading after the reports were published. In the main trading on Tuesday, the securities fell by 1.4% to $149.4. Since the September peak, the shares have lost more than half of their value: investors on Wall Street began to worry about the scale of costs and the complexity of implementing such a large infrastructure construction program, explains Bloomberg.

Oracle's total revenue in the third quarter of fiscal 2026 rose 22% year-over-year to $17.19 billion. Analysts polled by LSEG expected $16.91 billion, CNBC writes. Adjusted earnings per share totaled $1.79. Net income rose 27% to $3.72 billion, or $1.27 per share. This was the first quarter in more than 15 years when Oracle was able to achieve revenue and profit growth of more than 20%, MarketWatch writes, citing the company.

Total cloud revenue - including SaaS infrastructure and software - totaled $8.9 billion in the third quarter, up 44% from a year earlier and above the StreetAccount analyst consensus forecast of $8.85 billion, CNBC writes. Leasing Nvidia GPUs brings lower margins than selling software licenses, and Oracle recorded negative free cash flow of $13.18 billion over the past 12 months, the channel noted.

Capital expenditures - a measure of investment in the construction of data centers and infrastructure - amounted to about $18.6 billion in the reporting quarter. This is significantly higher than analysts' expectations: they expected Oracle to report spending $14 billion, writes CNBC.

Oracle's shares were worth nearly a quarter of what they were at the start of 2026 before taking off in the postmarket on March 10. However, Wall Street thinks the securities are worth buying: they have 35 Buy and Overweight ratings versus nine Hold recommendations and one Sell, MarketWatch shows.

The average target price of $254.65 is 70% above the last closing level.

This article was AI-translated and verified by a human editor