Oracle's cloud computing business expanded more than Wall Street had anticipated, signaling that its massive investments in large-scale artificial intelligence (AI) data center projects are beginning to pay off. The company's stock climbed over 6% in after-hours trading.
In its fiscal fourth-quarter earnings report released Thursday evening, the closely watched cloud infrastructure segment posted a staggering 121% year-over-year revenue increase, reaching $7.4 billion. This figure surpassed the analyst consensus estimate of $7.19 billion. Oracle is undergoing a strategic transformation from a traditional database software vendor into a leading AI computing infrastructure provider, aggressively building out data centers to serve high-profile clients such as OpenAI.
The stock had previously fallen roughly 38% from its year-to-date high reached on June 1st, as investors grew concerned about financing requirements, escalating component costs, and various challenges inherent in data center construction. During the quarter ending August 31st, Oracle's capital expenditures totaled $28.5 billion, predominantly directed toward data center equipment.
Chief Financial Officer Hilary Maxson reiterated the company's capital expenditure projection of $70 billion for the fiscal year ending May 2027. Additionally, Oracle anticipates allocating a further $20 billion to $25 billion for prepayments covering certain components. The company also reported securing over $30 billion in new AI cloud contracts during the quarter, which has further bolstered its remaining performance obligations—a key indicator of future revenue.
In a related development, Oracle finalized its at-the-market equity offering program, successfully raising $20 billion in capital. This move came in response to earlier skepticism from some analysts regarding the timing of such financing activities. Total quarterly revenue grew 30% year-over-year to $19.3 billion, while adjusted earnings per share came in at $1.92, comfortably beating the average analyst estimate of $1.75.