Oracle (ORCL 4.46%) just delivered something extraordinary -- a quarterly earnings miss that sent its stock soaring 30% in after-hours trading. The company reported non-GAAP earnings per share of $1.47, compared to estimates of $1.48 and revenue of $14.9 billion versus the expected $15 billion. Yet instead of grilling management about the shortfall, Wall Street analysts used words like "blown away," "momentous," and "in shock" in a very good way."
Why would professional analysts react this way to disappointing numbers? Oracle just unveiled a growth trajectory that rewrites everything investors thought they knew about this 48-year-old enterprise software giant. The company's artificial intelligence (AI) initiative is quickly becoming the picks-and-shovels provider for the entire AI revolution.
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Here's why this software giant just became a no-brainer growth play.
The $144 billion bombshell
Oracle's cloud infrastructure (OCI) revenue is set to reach $18 billion in fiscal 2026, up 77% year over year from $10 billion. That growth rate exceeds what Amazon's AWS, Microsoft's Azure, or Alphabet's Google Cloud achieved at comparable revenue scales. But here's where it gets truly shocking: Management projects OCI revenue will hit $32 billion by fiscal 2027, then $73 billion, $114 billion, and finally $144 billion by fiscal 2030.
These aren't pie-in-the-sky projections from an overeager start-up. Oracle's remaining performance obligations -- essentially its contract backlog -- exploded 359% year over year to $455 billion. When you have nearly half-a-trillion dollars in committed future revenue, growth projections become less speculation and more mathematical certainty.
The multicloud masterstroke
While AWS and Azure fight for market dominance, Oracle chose cooperation over competition. The company's multicloud database revenue -- running Oracle services on competitors' clouds -- skyrocketed 1,529% year over year. Oracle plans to add 37 new data centers through partnerships with hyperscalers, bringing its total to 71 locations across AWS, Azure, and Google Cloud.
This strategy is brilliant. Instead of trying to convince enterprises to abandon their existing cloud providers, Oracle brings its database and AI services directly to where customers already operate. It's capturing growth without requiring painful migrations or vendor switches. The approach has secured multibillion-dollar AI contracts with OpenAI and Meta, along with deep infrastructure partnerships with Nvidia that embed its graphics processing units (GPUs) into Oracle's cloud at massive scale.
Oracle is committing $35 billion in capital expenditures for fiscal 2026, a 65% increase, to build AI-ready infrastructure. The company's upcoming Oracle AI Database will let customers integrate leading AI models like ChatGPT, Gemini, and Grok directly with their Oracle databases. This positions Oracle as the connective tissue between enterprise data and the AI revolution.
The AI trajectory is the reason to buy
Deutsche Bank analyst Brad Zelnick captured the moment perfectly: "There's no better evidence of a seismic shift happening in computing than these results." Oracle isn't competing for scraps in the traditional database market anymore. It's positioning itself as essential infrastructure for the $500 billion AI market projected by decade's end.
Oracle's stock has surged over 30% since the earnings announcement, marking its biggest rally since the dot-com boom. The company's market cap has swelled past $870 billion as investors rush to price in the explosive growth trajectory. While the surge has pushed Oracle's valuation higher in the near term, the massive $455 billion backlog and path to $144 billion in cloud revenue by 2030 suggest the market is finally recognizing Oracle's transformation from database vendor to AI infrastructure powerhouse.
Oracle has successfully reframed its narrative from legacy database vendor to AI infrastructure powerhouse. With locked-in contracts, aggressive expansion plans, and a multicloud strategy that sidesteps competitive battles, the company offers investors something rare: hypergrowth backed by half-a-trillion dollars in committed revenue. For investors seeking exposure to AI infrastructure without the froth of speculative start-ups, Oracle has become the no-brainer choice.
