AI orders drive Oracle Corporation (ORCL.US) Q3 performance surpassing expectations, with cloud infrastructure revenue increasing by 84% year-on-year.

Against the backdrop of continuous explosive demand for artificial intelligence infrastructure, American Software, Inc. Class A giant Oracle Corporation (ORCL.US) announced its third quarter performance for the fiscal year 2026, showing that its cloud business growth significantly exceeded market expectations and gave a strong outlook for future revenue prospects, indicating that the company is gradually fulfilling the huge orders from large AI customers. Oracle Corporation announced on Tuesday that as of the end of the third quarter of the fiscal year ending February 28, the company's highly watched cloud infrastructure business revenue increased by 84% year-on-year to reach $4.9 billion, exceeding analysts' previous estimates of 79% and significantly faster than the 68% growth rate in the previous quarter. In recent years, Oracle Corporation has been accelerating its transformation into the field of artificial intelligence infrastructure. In addition to its traditional database software business, the company is providing computation and cloud services needed for training and deploying artificial intelligence models to customers such as OpenAI, Meta Platforms (META.US), through the construction of data centers equipped with a large number of chips. The financial report shows that the remaining performance obligations (RPO) that measure the scale of future orders reached $553 billion, up from $523 billion in the previous quarter. The company stated that this growth primarily comes from large AI contracts, in which clients usually provide funding support for the preliminary purchase of key equipment such as semiconductors. Looking ahead, Oracle Corporation expects total revenue for the fiscal year 2027 (starting in June of this year) to reach $90 billion, significantly higher than the market's average expectation of $86.7 billion. The company stated in its announcement that the growth rate of cloud computing demand for artificial intelligence training and inference still exceeds market supply. Oracle Corporation pointed out that some of the largest AI cloud computing customers have recently shown significant improvement in their financial conditions, which gives the company confidence not only to achieve its growth target for the fiscal year 2027 but also to potentially exceed current expectations for revenue growth in the coming years. Boosted by the positive performance, Oracle Corporation's stock price rose by 10% in after-hours trading on Tuesday. However, the stock had experienced a significant pullback before, with the closing price on that day being $149.4, down more than 50% from its high point in September of the previous year, mainly due to Wall Street's concerns about the cost pressure and execution risks brought about by the company's large-scale construction of AI data centers. The financial report shows that the company's capital expenditure for the quarter was approximately $18.6 billion, significantly higher than analysts' expectations of $14 billion, reflecting its continuous investment in data centers and AI infrastructure. At the same time, Oracle Corporation is also improving internal efficiency through artificial intelligence technology. The company stated that with the advancement of AI-assisted programming technology, its product development team is undergoing restructuring and gradually downsizing. "The new AI code generation technology allows us to develop more software in less time with fewer manpower." Previously, there were reports that Oracle Corporation plans to lay off thousands of positions internally to lower costs. The company disclosed that by the end of the fiscal year ending in May of this year, it is expected to incur $1.6 billion in restructuring costs, which is also the largest restructuring plan in the company's history. Overall, Oracle Corporation's total revenue in Q3 increased by 22% year-on-year to $17.2 billion. After excluding some items, earnings per share were $1.79, higher than the market's expected $1.70; revenue also exceeded analysts' estimates of $16.9 billion. In addition, the company's cloud application business revenue increased by 13% year-on-year to $4 billion, basically meeting market expectations.