AI Orders Drive Oracle(ORCL.US)Q3 Results Beat Expectations Cloud Infrastructure Revenue Surges 84% Year-over-Year

Amid the ongoing surge in artificial intelligence infrastructure demand, American software giant Oracle (ORCL.US) announced its Q3 FY2026 results, showing significant cloud business growth well above market expectations and providing strong guidance for the next year’s revenue outlook, indicating the company is gradually fulfilling large AI client orders.

On Tuesday, Oracle issued a statement saying that as of February 28, in Q3, its highly watched cloud infrastructure revenue increased by 84% year-over-year to $4.9 billion, surpassing analysts’ previous estimate of 79% growth and significantly faster than the 68% growth in the previous quarter.

In recent years, Oracle has been accelerating its transformation into the artificial intelligence infrastructure sector. In addition to its traditional database software business, the company is building data centers equipped with numerous chips to provide the computing power and cloud services needed for training and deploying AI models for clients like OpenAI and Meta Platforms (META.US).

The financial report shows that remaining performance obligations (RPO), which measure future order volume, reached $553 billion, up from $523 billion in the previous quarter. The company stated that this growth mainly stems from large AI contracts, in which clients often provide upfront funding for key equipment such as semiconductors.

Looking ahead, Oracle expects total revenue for FY2027 (starting this June) to reach $90 billion, significantly above the market average forecast of $86.7 billion. The company stated that the growth rate of cloud computing demand for AI training and inference still exceeds market supply.

Oracle pointed out that some of its largest AI cloud computing clients have recently improved their financial conditions, giving the company confidence not only to achieve its FY2027 growth targets but also to potentially exceed current expectations for revenue growth in the coming years.

Boosted by strong earnings, Oracle’s stock price rose as much as 10% in after-hours trading on Tuesday. However, the stock had previously experienced a notable pullback, closing at $149.40, more than 50% below its September high last year, mainly due to Wall Street concerns over the cost pressures and execution risks associated with large-scale AI data center construction.

The financial report shows that the company’s capital expenditures for the quarter were approximately $18.6 billion, significantly higher than the $14 billion expected by analysts, reflecting ongoing investments in data centers and AI infrastructure.

Meanwhile, Oracle is also using AI technology to improve internal efficiency. The company stated that with advances in AI-assisted programming, product development teams are restructuring and gradually reducing their size. “New AI code generation technology allows us to develop more software in less time and with fewer personnel.”

Earlier media reports indicated that Oracle plans to cut thousands of jobs internally to reduce costs. The company disclosed that it expects to incur $1.6 billion in restructuring costs during the fiscal year ending this May, marking its largest restructuring effort in history.

Overall, Oracle’s Q3 total revenue grew 22% year-over-year to $17.2 billion. After excluding certain items, earnings per share were $1.79, above the market forecast of $1.70; revenue also exceeded analysts’ expectations of $16.9 billion. Additionally, the company’s cloud application revenue increased 13% year-over-year to $4 billion, roughly in line with market expectations.