Oracle (ORCL) is set to report fiscal fourth-quarter 2026 earnings after the market closes on Wednesday, June 10. Ahead of the earnings report, ORCL stock has surged more than 40% over the past three months as demand for artificial intelligence (AI) infrastructure and cloud computing has accelerated.
However, concerns have recently surfaced over how the company will finance its rapidly expanding AI infrastructure. These worries intensified after Alphabet (GOOGL) announced plans to raise $80 billion in new capital, prompting investors to reassess how large tech companies will fund their AI-related investments. The development is now pressuring Oracle shares.
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Notably, Oracle's management has already taken significant steps to address its funding needs. In February, the company announced plans to raise up to $50 billion through a combination of debt and equity financing, while indicating that no additional bond issuances are expected during calendar-year 2026 beyond that target.
Since then, Oracle has moved quickly, raising roughly $30 billion through bond offerings and mandatory convertible preferred stock. Management has also emphasized that many of its largest AI contracts require limited incremental capital from Oracle itself.
During the company's Q3 earnings call, executives noted that much of the growth in remaining performance obligations (RPO) came from large-scale AI agreements. In many cases, customers either make upfront payments to allow Oracle to purchase the necessary GPUs or purchase the hardware themselves and supply it to Oracle, reducing the company's capital burden.
While Oracle faces immense capital pressure to fund its AI infrastructure development, the bigger question heading into earnings is whether the company can generate enough growth to justify its massive AI investments. With cloud demand accelerating and AI infrastructure spending showing no signs of a slowdown, Oracle’s growth trajectory appears solid.
www.barchart.com Oracle Q4 Earnings: AI Demand to Fuel Another Beat
With demand for cloud computing for AI training and inference continuing to surge, Oracle appears well-positioned to deliver another quarter of strong growth. The company has emerged as a key beneficiary of AI spending, thanks to its rapidly expanding cloud infrastructure business and growing partnerships with major cloud providers.
At the same time, many of the largest buyers of AI computing capacity have strengthened their financial positions, supporting continued investment in AI projects.
In Q3, Oracle generated $17.2 billion in revenue, up 22% year-over-year (YOY). Cloud revenue climbed 44%, while software revenue increased 3%. The company's momentum appears to be carrying into Q4, driven primarily by explosive growth in its multicloud database and AI infrastructure businesses.
One of the most notable highlights from Q3 was Oracle's multicloud database revenue, which surged 531% YOY. AI infrastructure revenue also delivered exceptional growth, rising 243% YOY. Management noted that demand for both services continues to exceed available capacity, suggesting that growth could remain strong as Oracle expands its infrastructure footprint.
The strength of customer demand is also reflected in Oracle's massive RPO, which reached $553 billion. This backlog provides significant visibility into future revenue and reflects the scale of demand for Oracle's cloud services.
As for Q4, management expects total revenue to increase between 19% and 21%. Cloud revenue is projected to grow between 46% and 50%, indicating that cloud remains the primary driver of the company's expansion.
Profitability is also expected to improve. Oracle forecasts adjusted EPS of $1.96 to $2, representing YOY growth of roughly 15% to 17%.
Wall Street currently expects Oracle to report earnings of $1.58 per share for the quarter, up more than 17% YOY. Notably, Oracle has beaten consensus earnings estimates in each of the past four quarters, including a 6.7% surprise in Q3.
Oracle Stock to Sustain AI-Driven Rally
Oracle's Q4 earnings report will likely reflect surging demand for AI infrastructure and cloud services. With cloud growth accelerating, a record backlog providing long-term visibility, and a consistent track record of beating earnings expectations, Oracle appears well-positioned to deliver another strong quarter.
Wall Street analysts are bullish and maintain a “Strong Buy” consensus rating on ORCL stock ahead of the Q4 earnings release.
www.barchart.com On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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