Oracle Accelerates AI Data Center Expansion Amidst Growing Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Surge in Capital Expenditure: Oracle's capital spending more than doubled to $48 billion in fiscal 2026 from $21.2 billion the previous year, indicating a robust commitment to AI infrastructure development, which, despite causing a stock price drop, will enhance competitive positioning in the long run.
- Revenue and Earnings Growth: Oracle reported a 21% year-over-year revenue increase to $19.2 billion, surpassing Wall Street's expectations of $19.09 billion; however, the stock still fell due to capital expenditure pressures, reflecting the market's underestimation of its growth potential.
- Significant Increase in Remaining Performance Obligations: Oracle's remaining performance obligations (RPO) soared to $638 billion at the end of fiscal Q4, up from $138 billion the previous year, indicating substantial future revenue conversion potential, with 46% expected to convert into revenue over the next three years.
- Future Growth Expectations: Oracle anticipates fiscal 2027 revenue of $90 billion, a 33% increase, and expects earnings per share to rise by 18% to $8.05, showcasing strong growth potential in the AI market, with a possibility of reaching a $1 trillion market cap in the next three years.
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 183.530
Low
180.00
Averages
309.59
High
400.00
Current: 183.530
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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