On Wednesday, shares of enterprise software giant Oracle Corporation closed with a gain of over 9%, as investors reacted positively to its latest strong quarterly financial results. The core driver of this surge stemmed from the company’s high growth in its cloud infrastructure business and its deep involvement in the field of artificial intelligence.
The financial report showed that in the third quarter of fiscal year 2026 ending February 28, Oracle’s (ORCL) total revenue increased by 22% year-over-year, reaching $17.2 billion. This achievement was primarily attributed to the robust performance of its cloud infrastructure business, whose revenue soared by 84% to $4.9 billion. Among this, revenue from infrastructure directly related to AI surged by 243%, highlighting the immense market demand for AI computing power. In an analyst conference call, Oracle CEO Clay Magouyrk admitted, “Current market demand for AI infrastructure, including both GPUs and CPUs, continues to outstrip supply.”
In addition to revenue growth, the company’s profitability also improved, alleviating market concerns that its large-scale data center construction might squeeze short-term profits. This quarter, Oracle’s adjusted operating income grew by 19%, reaching $7.4 billion; adjusted earnings per share were $1.79, a 21% increase year-over-year, surpassing Wall Street’s expectations of $1.69.
In response to external views that artificial intelligence would disrupt the traditional software industry, Oracle’s management explicitly expressed a different opinion during the earnings conference call. Co-CEO Mike Sicilia pointed out that enterprise-level software systems are extremely complex, far from being replaceable by simple AI tools or scattered functions. On the contrary, the company is actively integrating AI technology into its own software development and products to enhance competitiveness. He emphasized, “These massive systems are not replaceable by a bunch of small AI-assembled features.”
Oracle’s strategy extends far beyond just embedding AI into software. By building data centers and cloud infrastructure on a large scale, Oracle is constructing a dual business model of “Software + Infrastructure.” The company projects its capital expenditure for fiscal year 2026 to be as high as $50 billion, primarily used to expand related facilities to meet the explosive global demand for AI computing power and to provide customers with leasing services for servers and storage resources.
Looking ahead, Oracle is confident about the future. The company expects fourth-quarter revenue and adjusted earnings per share to grow by 19% to 21% and 15% to 17%, respectively. Management further projected that by fiscal year 2027, the company’s annual revenue could grow to $90 billion, up from $67 billion in fiscal year 2026. Magouyrk stated, “We believe that the investments we’re making now in data centers, computing capacity, and customer relationships are only going to become more valuable over time.”
