Elder Oracle completely shifts the AI narrative

Oracle’s quarterly update flipped the narrative with a "sudden" 36% jump in share value. Although the company did not hit specialists' predictions on revenue ($14.93b vs expected $15.04b) or earnings-per-share ($1.47 vs $1.48), a towering cloud backlog and long-term AI contracts materialised in the narrative-shifting $455 billions in Remaining Performance Obligations (RPOs), up 359% in both USD and constant currency. Oracle has also raised capital spending plans to $35 billion for new data centers.

The driver is infrastructure. Management highlighted four multibillion, multiyear AI deals and set an ambitious path for Oracle Cloud Infrastructure (OCI), with guidance pointing to a steep ramp and external reporting noting a target of $18 billion in OCI revenue next fiscal year, and RPO projections stepping up in subsequent years. The broader takeaway is that Oracle is committing hard dollars to capacity and locking in demand to match.

Questions remain around concentration risk, customers’ ability to fund outsized commitments, and the profitability of AI workloads. Still, multiple banks raised targets or upgraded the stock, calling the print “truly awesome,” and framing Oracle as a leader in AI infrastructure.  A company long tagged as legacy has, through custom infrastructure and long-term capacity assurance, become a chief enabler to the fastest-paced industry of the present. And the market is responding. Trackers showed Larry Ellison as the world’s richest person after the move, even as some lists lagged in updating.

Sources:
Yahoo FinanceCNBC
Saanya OjhaMorningStar

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