Oracle Stock Price Rally: What the Latest Earnings Say About the Future

Oracle (NYSE: ORCL) just released its first-quarter financial results for the fiscal year 2026. Even though the headline figures may not have met some analysts’ expectations, the underlying story has delivered a clear message to the market: The company is a major player in the fast-growing cloud market and AI is at the centre of it.

Oracle stock price’s big jump in after-hours trading and the gains that followed show that investors are looking past a small earnings miss and focused on the company’s huge and unparalleled future growth.

Earnings Highlights: Cloud at the Centre of Strong Growth

Even though the company’s revenue and earnings per share (EPS) expectations were a little off, shares rose by more than 28% in Wednesday’s pre-market trading session. This reaction shows how excited investors are about Oracle’s bold plans for cloud and AI growth, which they see as more important than the small miss.

Oracle’s revenue for the quarter ending August 31, 2025, was $14.9 billion. This was a 12% rise in USD and an 11% increase in constant currency compared to the corresponding quarter last year. Wall Street analysts were expecting this number to be about $15 billion, thus it was roughly $100–117 million below the forecast. Non-GAAP earnings per share were $1.47, which is 6% above last year but less than the $1.48 that was expected. The GAAP EPS was $1.01, which is a 2% drop from the previous year.

Normally, a miss like this would cause Oracle stock price to drop, but this case was anything but normal. The main narrative wasn’t in the past, but in the company’s strategy for the future. The report’s most surprising and impactful information was that Remaining Performance Obligations (RPO) rose by 359% from YoY, reaching an incredible $455 billion.

RPO is an important number that shows how much contracted revenue has not yet been accounted for. This huge rise is directly linked to the signing of numerous multi-billion-dollar contracts in the quarter. Oracle’s management says that the RPO is likely to go beyond half a trillion dollars in the coming months as they conclude more deals.

Oracle is Banking On AI For Long-Term Growth

Oracle’s earnings story is closely tied to artificial intelligence, and the company has established its footing as an important player in the battle to build AI infrastructure. The company said it would release the “Oracle AI Database” at its next event, Oracle AI World, next month.

Guidance made the AI hype much bigger. Oracle projects that Cloud Infrastructure (OCI) revenue will reach $18 billion in fiscal 2026, a 77% increase from the previous year. Projections for OCI’s future growth indicate that it could reach $32 billion in FY2027, $73 billion in FY2028, $114 billion in FY2029, and an astounding $144 billion in FY2030.

Post-Earnings Outlook

Oracle has done better than its tech peers so far this year, thanks to AI tailwinds. Oracle stock price, which is about 25 times its expected earnings, seems fair given its projected growth path. Oracle’s Q1 results show that the business is moving quickly into the AI era, with cloud infrastructure as the engine.

The earnings loss was just a small part of the big news about the company’s outlook and RPO growth. This has backed up CEO Larry Ellison’s vision of Oracle as a leader in AI infrastructure.

The market is clearly confident that Oracle’s big investments in its cloud business and strategic collaborations, especially with AI leaders, are paying off. The huge RPO gives a strong base for future revenue development, which eases worries about short-term changes.

Still, you should exercise caution. There remain valid concerns about high valuation multiples and plans for capital spending to fulfill the rising demand. One report said that rising operating costs of $6.25 billion were putting pressure on margins. Still, everyone agrees that the potential for long-term growth is much greater than these risks.

In Summary

In conclusion, Oracle’s most recent earnings release was a turning point. The minor deficits in the most recent earnings report were entirely overshadowed by the news of a huge backlog and an positive long-term outlook driven by demand for AI and cloud infrastructure. In a market that is obsessed with AI winners, Oracle’s pivot puts it in a good position to remain on the growth path many years to come. However, it is important to keep an eye on the competition and the economy as a whole.

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