Oracle CEO Safra Catz announced on Monday that the company projects strong revenue growth in fiscal years 2026 and 2027, reflecting a surging and seemingly unabated demand for advanced AI computing. According to LSEG data, Oracle forecasts a 15% revenue increase in fiscal year 2026 and a 20% jump in fiscal year 2027, exceeding analyst expectations.

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Oracle, a relatively late entrant to the cloud market dominated by Microsoft and Amazon, is aggressively integrating AI capabilities into its cloud offerings to handle massive datasets. To support these data-intensive AI services, the company is strategically expanding its infrastructure, including investments in data centers and semiconductor technology. Oracle Chairman Larry Ellison stated, "We plan to double the capacity of our data centers within this calendar year. Customer demand is at record levels."

Oracle is also involved in an AI joint venture called "Stargate," partnering with ChatGPT developer OpenAI and SoftBank. This venture has pledged up to $500 billion in investment towards AI development in the US. Analyst Gil Luria commented, "Next fiscal year's guidance is exceptionally strong, reflecting Oracle's ability to grow its cloud business."

Catz also mentioned during the earnings call that the company will double its capital expenditure this fiscal year to $16 billion, stating that demand significantly outstrips supply. However, Rebecca Wettemann, CEO of industry analysis firm Valoir, raised the question of whether cloud infrastructure providers are over-investing and overbuilding to support AI workloads that may not materialize or prove cost-effective.

In its latest earnings report, Oracle's cloud revenue grew 23% year-over-year to $6.2 billion in the third quarter. However, the company's total revenue of $14.13 billion fell short of the market consensus of $14.39 billion. Adjusted earnings per share were $1.47, compared to the market expectation of $1.49.

Key Highlights:

🌟 Oracle projects 15% and 20% revenue growth in fiscal years 2026 and 2027, respectively, exceeding analyst expectations.

📈 The company is aggressively expanding its infrastructure to support the growing demand for AI cloud services.

💰 Oracle expects to exceed $16 billion in capital expenditure this fiscal year, and its cloud revenue grew 23% in the third quarter.