Oracle: AI boosts its order backlog to $664 billion

Quarterly revenue increased by 30% year-on-year, reaching $19.3 billion. Cloud revenue grew by 62% to $11.6 billion, while the cloud infrastructure segment, central to Oracle’s AI push, soared by 121% to $7.4 billion.

Oracle stated that it signed over $30 billion in new AI-related cloud contracts during the quarter. Remaining performance obligations, which represent contracted revenue not yet recognized, now total $664 billion, an increase of $209 billion compared to a year ago.

The company claims to have added 850 megawatts of data center capacity and delivered over 300,000 graphics processors to its cloud customers since the end of the previous quarter. Net income attributable to shareholders rose by 60% to $4.7 billion, but free cash flow remained negative at $5 billion due to infrastructure investments.

AI demand reassures investors

The stock market reaction follows several months of uncertainty regarding the cost of expanding data centers and Oracle’s ability to quickly convert its AI contracts into revenue. On Friday morning, Reuters estimated that a 5.5% increase in the stock could add approximately $24 billion to the company’s market capitalization.

The race for computing capacity is accelerating across the sector. OpenAI has recently strengthened its presence in Asia with cloud capacity projects, while major providers are ramping up investments in data centers to meet the growing demand for artificial intelligence models.

Oracle anticipates a revenue growth of 30% to 34% for its second fiscal quarter. Cloud revenue is expected to increase by 65% to 71% in dollars, with adjusted earnings per share projected to be between $1.85 and $1.93.