Oracle stock rose 12% Wednesday morning after the company reported third-quarter earnings that beat analyst expectations and raised its fiscal 2027 revenue forecast to $90 billion.
Total revenue for the quarter rose 22% to $17.2 billion, the company said in its earnings release Tuesday. Analysts had projected $16.92 billion, according to The Wall Street Journal. Cloud revenue rose 44% to $8.9 billion, and cloud infrastructure revenue jumped 84% to $4.9 billion. Non-GAAP earnings per share came in at $1.79, above the $1.70 analysts had expected.
Remaining performance obligations — a forward-looking metric reflecting the value of contracted work not yet delivered — ended the quarter at $553 billion, up 325% from a year earlier, Oracle said. The company said most of the increase reflects large-scale AI contracts, many of which are funded upfront through customer prepayments or customer-supplied GPUs.
Oracle said demand for cloud computing for AI training and inference continues to grow faster than supply. Oracle’s new $90 billion target for fiscal 2027 tops the $86.61 billion that Wall Street had been expecting, according to The Wall Street Journal. It reaffirmed its fiscal 2026 revenue forecast of $67 billion.
The strong results mark a reversal from Oracle’s previous quarter, when the stock fell more than 16% after revenue missed analyst expectations.
Oracle executives also addressed investor fears that AI will displace traditional software-as-a-service companies. Chairman Larry Ellison said during the earnings call that AI coding tools are enabling Oracle to build a broader set of software faster. “That’s why we think the Saaspocalypse applies to others but not to us,” Ellison said.
Co-CEO Mike Sicilia echoed the view. “I do think that AI tools and their coding capabilities would be a threat if we weren’t adopting them, but we are, and very rapidly,” Sicilia said. The shift has come with job cuts. Oracle recorded $153 million in restructuring charges during the quarter, a figure that included severance costs, according to The Wall Street Journal.
Earlier this year, Oracle raised $30 billion through investment-grade bonds and mandatory convertible preferred stock within days of announcing a plan to raise up to $50 billion in debt and equity financing, the company said.
For the fourth quarter, Oracle is guiding for revenue growth of 19% to 21% in U.S. dollars and non-GAAP earnings per share of $1.96 to $2.00.