Oracle shares surge nearly 40% as AI cloud contracts lift future revenue outlook

Oracle shares jumped nearly 40% Wednesday after the software company said its growing slate of multibillion‑dollar AI cloud contracts has pushed its remaining performance obligations — future revenue under signed contracts — to $455 billion and is on track to exceed half a trillion dollars.

The rally, the stock’s strongest single‑day move since 1999, followed an earnings report and investor call in which Chief Executive Safra Catz said Oracle signed four multibillion‑dollar contracts in the first quarter with three customers and has inked deals with prominent AI players including OpenAI, xAI and Meta. Catz said the company expects to sign several more multibillion‑dollar contracts that will lift remaining performance obligations past the $500 billion mark.

The surge dramatically increased the market value of co‑founder and chairman Larry Ellison’s stake: Ellison owns roughly 1.16 billion Oracle shares and stood to see an estimated one‑day paper gain of about $90 billion if the stock price held, a move that would approach the largest single‑day personal gain on record and put him closer to the top of the global rich list.

Oracle’s report showed revenue of $14.9 billion for the quarter, a hair below Wall Street’s consensus of $15 billion, and adjusted earnings per share of $1.47 versus estimates of $1.48. The company said it will increase capital expenditures substantially, forecasting roughly $35 billion in capex for fiscal 2026, up from prior guidance around $25 billion.

Catz outlined an aggressive multiyear revenue trajectory for Oracle Cloud Infrastructure tied to AI demand. The company projects OCI revenue to grow 77% to about $18 billion in the current fiscal year and then to climb to $32 billion, $73 billion, $114 billion and $144 billion in successive years, reaching $144 billion by the 2030 fiscal year.

Oracle has invested heavily in AI infrastructure, including building a large inventory of Nvidia AI accelerators and using its data‑center capacity to provide compute to AI firms. The company has also pursued large customer commitments; in June it said it had secured a deal expected to generate more than $30 billion in annual revenue beginning in fiscal 2028, a contract several media outlets have reported involves OpenAI.

The company’s push into AI has come amid cost moves that include layoffs and reports that management discussed pausing raises and bonuses to help fund infrastructure expansion. Oracle’s strategy has combined aggressive capital spending, large enterprise contract signings and partnerships with major AI developers to expand its cloud footprint.

Oracle is also tied to broader, government‑backed AI infrastructure initiatives. The company has been named in media coverage around Stargate, a proposed $500 billion effort to accelerate AI data center construction that was announced at the White House earlier this year and involves OpenAI and SoftBank. The Wall Street Journal reported in July that Stargate had scaled back some of its initial near‑term plans as partners worked through deal execution.

Analysts and investors have focused on Oracle’s remaining performance obligations as a gauge of future revenue streams tied to long‑term cloud contracts. RPO rose 359% year over year to $455 billion, according to the company, driven by the newly announced multibillion‑dollar deals and renewals. The sizeable backlog underpins management’s projection that Oracle’s AI‑related cloud business can scale rapidly over the coming years.

While the stock move reflects investor enthusiasm for Oracle’s AI positioning and contract backlog, the company’s latest quarter showed only a slight miss on top‑line and per‑share expectations. Oracle said it expects cloud growth and further contract signings to underpin its multiyear forecasts, and it signaled a material step‑up in infrastructure spending to support those commitments.

The company did not disclose all customer names tied to the multibillion‑dollar agreements on the earnings call, citing confidentiality in some cases, but Catz reiterated that the contracts include several of the largest players in the AI sector. Management said it anticipates announcing additional large arrangements in the quarters ahead and will continue investing in chip capacity and data‑center build‑out to meet demand.

Investors and market watchers will be monitoring the sustainability of the stock’s advance, the pace of additional contract signings, the execution of the company’s sharp capex ramp and how effectively Oracle converts its large RPO backlog into recognized revenue in coming years.