Oracle’s cloud sales beat estimates as surging AI demand outpaces supply
Firm is embarking on a major buildout of data centres for OpenAI and other customers
Oracle's cloud computing business outperformed analysts' expectations, highlighting the success of the company's strategic investments in AI data centres. In its fiscal first-quarter results released on Thursday, the company's cloud infrastructure sales surged 121% to $7.4 billion, exceeding the average analyst projection of $7.19 billion.
In addition, Oracle announced its intention to periodically sell $20 billion of equity at market value. This shift in focus from traditional database software to AI infrastructure development, particularly with major customers like OpenAI, has attracted Wall Street's attention to the scale of Oracle's spending and the pace of its data centre construction.
During the quarter, Oracle added 850 megawatts of data centre capacity, and reported $28.5 billion in capital expenditures, mostly on data centre equipment. CFO Hilary Maxson confirmed the company's year-end spending forecast of $70 billion for 2027, with an additional $20 billion to $25 billion due to prepayments for some components.
The company booked over $30 billion in additional AI cloud contracts during the quarter, boosting its remaining performance obligations, which measure future revenue. Revenue from cloud applications rose 10% to $4.22 billion, while software revenue declined 3% to $5.55 billion, reflecting the ongoing migration of customers to cloud-based solutions.
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- Oracle's quarterly revenue beats estimates as AI boom drives cloud demand channelnewsasia.com
