Oracle shares surged by as much as 14% on Thursday, June 12, 2025, reaching a new all-time high, after the company reported strong fourth-quarter fiscal year 2025 earnings and, more significantly, provided an exceptionally bullish outlook for its fiscal year 2026.
The substantial leap was primarily driven by burgeoning demand for Oracle’s artificial intelligence (AI)-powered cloud services, positioning the tech giant as a formidable player in the growing AI infrastructure market.
Robust results
For its fourth quarter of fiscal year 2025, which ended on May 31, Oracle delivered robust financial results that exceeded analyst expectations.
Total revenue for the quarter rose by 11% year-over-year to $15.9 billion, surpassing the consensus estimate of $15.59 billion.
This growth was largely propelled by the performance of its crucial cloud services and license support segment, which saw quarterly revenue climb by a healthy 14% to $11.7 billion.
Breaking down its cloud performance, Oracle Cloud Infrastructure (OCI) revenue surged by an impressive 62%, underscoring the strong uptake of its infrastructure offerings.
Earnings per share (EPS) also came in strong at $1.70 on a non-GAAP basis, beating the forecast of $1.64.
Optimistic forecast impresses Wall Street
However, the real catalyst for the stock’s meteoric rise was Oracle’s optimistic forecast for fiscal year 2026.
CEO Safra Catz projected total revenue to be at least $67 billion for the upcoming fiscal year, a significant increase from its previous forecast.
This aggressive outlook signals Oracle’s confidence in its continued transformation and its ability to capitalize on the booming AI sector.
Crucially, Oracle expects its total cloud growth rate (encompassing both applications and infrastructure) to accelerate dramatically, from 24% in fiscal year 2025 to over 40% in fiscal year 2026.
Even more striking, the company anticipates its Cloud Infrastructure (IaaS) growth rate to jump from 50% in FY25 to over 70% in FY26.
This acceleration is largely attributed to the increasing demand for high-performance computing necessary for AI workloads.
Oracle’s Remaining Performance Obligations (RPO), a key indicator of future revenue, also surged by 41% to $138 billion, with the company projecting RPO to grow by over 100% in FY26.
Burgeoning capex
Oracle is making substantial investments to meet this surging demand.
The company is significantly increasing its capital expenditures, with plans to spend over $25 billion in fiscal year 2026, primarily on data center equipment to expand its cloud capacity.
Catz pointed out that the expenses will be to establish Stargate’s first site in Abilene, Texas.
Stargate is a joint project aimed at providing large-scale computing power to OpenAI.
The company has also started renting out AI-focused computing power to companies such as Elon Musk’s xAI and Meta Platforms.
In March, Oracle announced a $5 billion investment in Britain.
A Reuters report said at least 9 brokerages raised their target price on the stock after the earnings.
Oracle’s shares hit its all-time high of $201.99 on Thursday.
The stock has gained over 20% in the year so far.
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