$ORCL (-4.36%) On Thursday, the company exceeded Wall Street’s expectations for first-quarter revenue and raised its full-year profit forecast, buoyed by strong demand for its cloud computing services driven by rising corporate spending on AI.
The company’s stock, which had fallen more than 20 percent this year, rose nearly 8 percent in after-hours trading.
The positive report suggests that Oracle’s heavy investment in data centers is paying off and helping the company win more corporate contracts.
Oracle’s stock has suffered significantly this year as investors have become increasingly concerned about rising capital expenditures, which have put pressure on the company’s free cash flow.
In July, S&P Global downgraded Oracle’s credit rating, citing weak cash flow and rising business risks.
Nevertheless, analysts expect Oracle’s revenue growth to accelerate significantly as the company expands its data center footprint. The company announced that it had brought 850 megawatts of capacity online during the June-August quarter.
Oracle’s backlog stood at $664 billion at the end of the quarter, up from $638 billion in the previous three months, while analysts had estimated $639.89 billion, according to data from Visible Alpha.
Total revenue rose 30 percent to $19.3 billion in the company’s first fiscal quarter, compared with analysts’ average estimate of $19.14 billion, according to data compiled by LSEG.
The company expects adjusted earnings per share of $8.10 for fiscal year 2027, compared with its previous forecast of $8.05. Analysts, on average, expect annual earnings of $8.07 per share.
For fiscal year 2027, the company forecasts revenue of at least $90 billion.