Oracle stock roared 40% higher on Wednesday after reporting gobsmacking cloud demand numbers, setting the company on track for a historic gain.
The cloud giant is on pace for its best day since 1992, and is now quickly approaching the $1 trillion market cap benchmark. Oracle is now at $950 billion.
The company said Tuesday after the bell that it has $455 billion in remaining performance obligations, up 359% from a year earlier.
“This is a very historic kind of print right here from Oracle with this backlog,” Ben Reitzes, technology research head at Melius Research, told CNBC’s “Closing Bell: Overtime” on Tuesday. “The Street was looking for about $180 billion in RPO and they’re talking about a number that is a multiple of that. That is astounding.”
Oracle has been one of the biggest benefactors of the artificial intelligence boom thanks to its cloud infrastructure business and its access to Nvidia’s graphics processing units, or GPUs, which are both needed to run large workloads. But competition is fierce, and Oracle is jostling with other cloud providers like Microsoft, Amazon and Google for customers.
Oracle’s founder, Larry Ellison, is set to add about $100 billion to his net worth, and is now the world’s second richest person behind Tesla CEO Elon Musk, according to Bloomberg’s Billionaires Index.
Oracle one-day stock chart.
Oracle now sees $18 billion in cloud infrastructure revenue in the 2026 fiscal year, with the company calling for the annual sum to reach $32 billion, $73 billion, $114 billion and $144 billion over the subsequent four years.
Other analysts were left “blown away” and “in shock.” D.A. Davidson’s Gil Luria called it “absolutely staggering on CNBC’s “Fast Money.” Wells Fargo analysts said it was a “momentous confirmation” of the AI trade.
Analysts at Deutsche Bank called Oracle’s results “truly awesome” in a Wednesday note, writing that the company has underscored its position as a leader in AI infrastructure.
They reiterated their buy rating on the stock and raised their price target to $335 from $240.
“In our near 20 years covering Oracle and for that matter the entire Software industry, there are few quarterly results that match F1Q both in terms of magnitude of revision and clarity of the moment,” the analysts said.
Bank of America analysts said Oracle’s “exceptional backlog” cements its place as “a key AI enabler.” They upgraded the stock to buy from neutral in a note on Wednesday.
“Although profitability of AI workloads remains a key debate, it is clear that Oracle is capturing share
in the large and rapidly growing market for AI infrastructure,” the analysts wrote.
Oracle’s cloud revenue projections overshadowed an otherwise lackluster first-quarter report in which the company missed expectations on the top and bottom lines.
The company had earnings of an adjusted $1.47 per share for the quarter, just below the $1.48 per share expected by analysts polled by LSEG. Revenue for the first quarter came in at $14.93 billion, missing the $15.04 billion expected.
–CNBC’s Jordan Novet contributed to this report
