Oracle stock jumps 7% on earnings beat and increased guidance as cloud revenue climbs 44%

Oracle's stock experienced a notable increase of 8% during after-hours trading on Tuesday, following the company's release of quarterly earnings that exceeded analysts' expectations. This positive performance also led to an upward revision of its revenue forecast for fiscal 2027, with management now anticipating a total of $90 billion, surpassing the LSEG analyst consensus of $86.60 billion. For the fiscal fourth quarter, Oracle is projecting adjusted earnings per share between $1.92 and $1.96, along with revenue growth expectations of 19% to 20%. In comparison, the consensus from LSEG had estimated earnings of $1.70 per share and a 20% increase in revenue. In the fiscal third quarter, which concluded on February 28, Oracle reported a 22% year-over-year increase in overall revenue. The company's net income rose to $3.72 billion, or $1.27 per share, compared to $2.94 billion, or $1.02 per share, during the same quarter last year. Notably, Oracle's adjusted earnings per share figure excludes stock-based compensation expenses. The company achieved $8.9 billion in total cloud revenue, marking a 44% increase that exceeded the $8.85 billion consensus forecast from analysts at StreetAccount. Particularly impressive was the 84% growth in cloud infrastructure revenue, which reached $4.9 billion, outpacing the 68% growth seen in the previous quarter. Despite the recent surge, Oracle's stock has seen a decline of over 50% since its September highs, reflecting broader concerns in the software industry regarding artificial intelligence, as well as specific apprehensions about the company’s considerable debt load, which is being used to finance its AI initiatives. As of the latest trading close, Oracle shares have fallen 23% in 2026, while the S&P 500 index has seen a decrease of less than 1% during the same timeframe. Oracle has secured significant contracts to provide cloud infrastructure for AI firms, including OpenAI, yet it faces challenges with cash reserves compared to larger rivals like Amazon and Microsoft. The company's strategy of renting Nvidia graphics chips offers lower profit margins than traditional software licensing, contributing to a reported negative free cash flow of $13.18 billion over the past year. In the recent quarter, Oracle announced ambitious plans to raise between $45 billion and $50 billion to enhance its cloud infrastructure capabilities. Furthermore, Oracle confirmed that two buildings are operational at its data center project in Abilene, Texas, which is being developed in partnership with Crusoe for OpenAI, despite conflicting media reports about the site's expansion plans. Company executives are set to discuss these results further during a conference call at 5 p.m. ET.