Cloud revenue prospects are more optimistic, AI newcomer Oracle raises full-year revenue guidance, surging nearly 7% after hours

Oracle, benefiting from the AI ​​application boom, released a more optimistic revenue outlook signal.

After the U.S. stock market closed on Thursday, September 12, Oracle's Executive Vice President Doug Kehring revealed at the company's financial analyst meeting this year that the company's revenue for the 2026 fiscal year is expected to reach at least $66 billion. This is an upward revision of $6.5 billion from the company's previous guidance, and the new guidance further exceeds the analysts' current average estimate of $64.5 billion.

Oracle's executives also predict that three years later, the company's annual revenue will exceed the trillion-dollar mark. In the 2029 fiscal year, the company's revenue will be at least $104 billion, indicating a nearly 58% growth in revenue over three years, with an expected 20% increase in earnings per share (EPS) by then.

After announcing the above expectations, Oracle's stock price, which rose by about 2.7% on Thursday, accelerated after hours, with a post-market increase of nearly 7%. If this upward trend continues on Friday, Oracle will set a new closing high for the fourth consecutive day.

Commentators believe that the upward revision of next fiscal year's revenue guidance is an optimistic signal for Oracle's Cloud Infrastructure (OCI) growth prospects. Known for its database software, Oracle is currently focusing on expanding in the OCI field. Oracle competes with Amazon, Microsoft, and Google's parent company Alphabet in the OCI domain by renting computing power and storage.

Oracle's cloud has been successful in generative AI workloads. The company previously stated that its customers include two AI startups, Reka and Musk's xAI. Oracle has also reached agreements with larger cloud infrastructure competitors to make it easier for Oracle's database software to run on their cloud platforms.

Oracle stated that migrating on-premises database customers to the cloud will be a key driver of the company's revenue growth. Kehring stated at Thursday's meeting that most of Oracle's database customers have not yet migrated to the cloud.

Earlier this week, Oracle announced stronger-than-expected performance for the most recent quarter compared to Wall Street expectations. Oracle pointed out in its financial report that the most significant news of the quarter was signing a multi-cloud agreement with Amazon Web Services (AWS), where Oracle's latest Exadata hardware and database software 23ai version will be embedded in AWS cloud data centers and AWS customers will have easy access to Oracle databases when launched in December this year.

After the U.S. stock market closed on Monday, Oracle announced that for the first quarter of the 2025 fiscal year ending in August, revenue exceeded expectations, growing by 7% year-on-year to $13.3 billion, with the highly anticipated OCI revenue also exceeding expectations, surging by 45% year-on-year to $2.2 billion. The guidance provided by Oracle at that time indicated that growth would accelerate this quarter. Oracle's second-quarter revenue guidance range is 8% to 10%, with the median value higher than analysts' expected growth rate of 8.72%.

After the financial report was released, Oracle's stock price continued to rise and set a new closing record high, with a significant 11.4% increase on Tuesday. As of Thursday's close, the stock price has risen by 53% since the beginning of the year, ranking second only to NVIDIA in AI concept stocks in terms of year-to-date gains

Morgan Stanley analyst Keith Weiss has emphasized that Oracle's stock performance so far this year has far exceeded that of its software industry peers. He attributes this strong performance to investors viewing Oracle as a major beneficiary of artificial intelligence (AI) hardware scarcity, which has driven the development of its OCI business.

According to Wall Street News, some analysts believe that OCI is key to Oracle's transformation from a traditional database company to an enterprise cloud service provider. Wall Street generally recognizes that strategic partnerships will help boost Oracle's AI performance. In addition to a "significant collaboration" with the "most mysterious" big data company Palantir in Silicon Valley, Oracle has been providing accelerated computing instances and software services to enterprises through OCI in partnership with NVIDIA for many years. This year, the collaboration between the two to provide AI solutions has expanded