Oracle stock jumped an astonishing 40% in early trading today after the company outlined the scale of the artificial intelligence boom hitting its core cloud business. This sort of move is rare for a company of Oracle’s size and marks the stock’s biggest single-day gain in over two decades. The trigger? Oracle (NYSE: ORCL) announced a wave of massive multiyear cloud deals, driven by customers urgently expanding their AI capabilities, and forecasted cloud revenue and booking numbers that left even the “Magnificent Seven” tech giants in the rearview mirror.
Although Oracle reported quarterly earnings and revenue that missed Wall Street expectations by slight margins, investors ignored the typical financial checklist and focused on the future Oracle spelled out. Chief Executive Safra Catz revealed that in the first quarter, Oracle signed four separate multi-billion-dollar contracts with three different customers. More strikingly, Oracle’s total contracted backlog, or what’s technically known as “remaining performance obligation”, exploded by 359% from a year ago and reached $455 billion. The company expects to cross the half-trillion-dollar mark in contract backlog within months, raising the prospect of overwhelming demand for its Oracle Cloud Infrastructure through 2026 and beyond.
In its boldest forecast yet, Oracle said that annual revenue from its cloud infrastructure unit, which powers much of today’s emerging AI platforms, is projected to leap 77% this year to $18 billion, grow to $32 billion next year, and rocket up to $144 billion in only four years. All of this growth, according to management, is underpinned by a “stampede” of enterprise and AI clients who need massive computational power as quickly as Oracle can provide it.
For years, Oracle was less celebrated in the cloud world than rivals like Amazon and Microsoft, but that may be changing with the arrival of generative AI and the scramble for computing scale. Oracle has leaned into lower-cost infrastructure, and its arms-length approach, allowing cloud platforms from Amazon, Google, and Microsoft to offer Oracle’s products alongside their own, has quietly attracted customers who want flexibility. The company’s claim that its databases “seamlessly connect” with cutting-edge AI systems including ChatGPT, Gemini and Grok piqued analyst interest and made AI startups and giants alike sign on.
The real star is Oracle Cloud Infrastructure (OCI). Over the past quarter, the scale and speed of growth in OCI contracts have begun to rival hyperscalers. The deals Oracle announced weren’t just with firms rushing to build language models. The contracts reached into large multinational enterprise software deployments and data center expansions, the kinds of projects that produce years of recurring revenue.
The immediate stock price reaction was as much about confidence and momentum as raw revenue. After a steady year for tech and AI, Oracle’s shares had already climbed 45% prior to this week, and Wednesday’s pre-market surge was set to drive Oracle’s market value up by over $230 billion, inching the company toward the trillion-dollar club. This optimism spilled over to semiconductor and data center hardware stocks as well, with companies like Nvidia and AMD trading up in sympathy
Despite Oracle’s headline misses on quarterly profit and sales, earnings per share of $1.47 on $14.9 billion in revenue, just shy of analyst expectations, there was near-universal agreement in the market that what counts now is Oracle’s “AI backlog boom”. Industry analysts and investors set aside old worries and endorsed the transformation as a genuine shift in enterprise technology spending.
Oracle’s extraordinary 33% jump at the open was driven entirely by investor belief that the AI revolution is only picking up steam and that Oracle has secured a front-row seat. For a business that started as an old-guard database giant, this shift is significant on multiple fronts, not only for Oracle’s shareholders but for tech markets globally.
