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Investors weren’t sure what to make of Oracle’s (ORCL-3.75%) fiscal third-quarter earnings expectations late Monday, which fell short of analysts’ expectations. Shares of Oracle climbed 5% in after-hours trading before sinking 3% as investors digested the missed targets. The stock was still off slightly in pre-market trading Tuesday.
While investors focused on the earnings whiff, company leaders focused on what Oracle CTO Larry Ellison called “hypergrowth” in its cloud and AI projects. Both are experiencing double-digit growth, and analysts and executives expect that to continue.
In the fiscal third quarter, Oracle reported total revenue of $14.13 billion, up 6% year over year, but short of analysts’ consensus estimates of $14.38 billion. On an adjusted basis, the company earned $1.47 per share, compared with expectations of $1.49 per share.
Oracle CEO Safra Catz touted a growth outlook for fiscal 2026 and 2027, pointing to continued demand for the company’s advanced artificial intelligence computing.
“ As we bring more capacity online, our revenues will clearly accelerate,” Catz said, referring to the data centers that Oracle continues to build.
“We are on schedule to double our data center capacity this calendar year,” Ellison said, adding that customer demand is at record levels.
Much of the company’s growth will come from growth in its AI and cloud services. Catz highlighted the company’s record order backlog of $130 billion, which doesn’t include the additional revenues generated from its participation in the so-called Stargate project.
Stargate, touted by President Donald Trump as a $500 billion AI infrastructure investment right after he took office, includes tech titans such as Meta (META-4.21%) and ChatGPT maker OpenAI. Progress is already underway on the project’s first data centers being constructed in Texas.
“Each building is a half-a-million square feet,” Ellison said. “There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location, which is our first location.”
—Britney Nguyen contributed to this article.
