New York, Sept 9 (Kiran News): Oracle (ORCL) will report its fiscal first-quarter earnings on Tuesday after market close, with Wall Street analysts projecting a sharp 30% year-on-year jump in cloud revenue, powered by demand for artificial intelligence (AI) infrastructure.
Shares of the enterprise software giant have surged more than 60% over the past year, reflecting investor optimism about its cloud expansion. The stock traded slightly lower, down less than 1%, ahead of the results.
AI Chips and Cloud Momentum
Oracle has been aggressively acquiring Nvidia GPUs, the most in-demand chips for AI, and renting out that computing power through its Oracle Cloud Infrastructure (OCI) platform. Analysts expect this strategy to lift Cloud Services revenue to $7.3 billion in Q1, making it the company’s largest growth driver.
For the August quarter, analysts surveyed by Bloomberg forecast adjusted earnings per share of $1.48 on revenue of $15 billion, compared with $1.39 per share on $13.3 billion in the same quarter last year.
Spotlight on $30 Billion AI Deal
Beyond quarterly figures, investors are watching for clarity on Oracle’s reported $30 billion contract, widely believed to involve OpenAI. The deal, announced in June, is projected to contribute significant revenue beginning in Oracle’s fiscal 2028, and pushed the company’s shares to record highs.
Barclays analyst Raimo Lenschow noted in a client note that commentary from management may outweigh the Q1 numbers themselves. Similarly, RBC Capital Markets analyst Rishi Jaluria wrote that investor reaction will hinge on details of the OpenAI deal, OCI profitability, and timelines for the Stargate project.
Stargate: $500 Billion AI Bet
The Stargate project, a $500 billion AI infrastructure initiative involving Oracle, OpenAI, and SoftBank, was unveiled in June at the White House by Oracle Chairman Larry Ellison, OpenAI CEO Sam Altman, SoftBank’s Masayoshi Son, and former U.S. President Donald Trump.
The initiative includes a massive data center in Abilene, Texas, designed to run over two million AI chips. OpenAI has said parts of the facility are already operational, while SoftBank has acknowledged delays in scaling up the project.
Profitability Questions Remain
Despite strong AI-driven momentum, analysts remain cautious about Oracle’s margins. Morgan Stanley’s Keith Weiss wrote that while Oracle’s growth prospects are clear, questions persist over profitability. The company has not reiterated its earlier 45% margin target for fiscal 2026, leaving uncertainty over the long-term economics of its AI infrastructure investments.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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