Oracle, the technology giant, recently announced Q4 2026 earnings that exceeded market expectations, while also raising its profit forecast for the new fiscal year. However, the company's stock fell sharply in after-hours trading following Oracle's announcement of plans to raise an additional $40 billion to expand its artificial intelligence (AI) infrastructure.
According to its financial report, Oracle posted adjusted earnings of $2.03 per share, exceeding analysts' forecasts of $1.96. Revenue reached $19.18 billion, a 21% increase year-over-year and surpassing market expectations. Net profit rose to $4.22 billion, or $1.45 per share.
Oracle maintained its revenue target for fiscal year 2027 at $90 billion, while raising its revised earnings forecast to $8.05 per share. For the first quarter of the new fiscal year, the company forecasts revenue growth of 27-29% and revised earnings of $1.72-$1.76 per share.
The growth momentum continues to come from the cloud computing sector. Cloud services revenue increased 47% to $9.91 billion, while cloud infrastructure revenue surged 93% to $5.8 billion. As of May 31st, the value of revenue-generating projects (RPOs) reached $638 billion, a 363% increase year-on-year and exceeding analysts' forecasts of $595.67 billion, primarily driven by large-scale AI contracts.
In many cases, customers have either paid Oracle in advance for graphics processors or purchased these processors themselves and supplied them to Oracle. According to the company, these arrangements help reduce the need for capital investment in building data centers.
Bank of America analysts say that more than 50% of Oracle's total unrecorded revenue contracts are currently related to OpenAI.
Clay Magouyrk, CEO of Oracle's cloud computing division, said the company plans to bring nearly one GW of new computing capacity online in the current quarter. This is equivalent to the total capacity Oracle has added throughout the entire fiscal year 2026.
Oracle also announced that Hilary Maxson, a former executive at Schneider Electric, has joined the company as its new Chief Financial Officer. Additionally, Related Digital and Blackstone have secured funding for an Oracle data center worth approximately $16 billion in Michigan.
However, investors are cautious about Oracle's plan to raise an additional $40 billion through debt and equity to finance data center expansion and AI computing capacity. This plan includes the previously announced $20 billion stock offering. In fiscal year 2026, Oracle spent $55.7 billion on capital investments, a 162% increase from the previous year, while recording negative free cash flow of $23.7 billion, and depreciation expenses nearly doubled to $7.62 billion.
According to Oracle, net capital expenditure in fiscal year 2027 is projected to reach approximately $70 billion. The company is currently accelerating the construction of new data centers to meet the growing demand from AI customers, including projects related to OpenAI.
Despite positive earnings results, Oracle shares fell about 10% in after-hours trading due to concerns about the scale of investment and the need for significant capital raising during its aggressive expansion into the AI sector.
However, as of the market close on June 10th, Oracle shares had risen approximately 3% since the beginning of 2026. During the same period, the S&P 500 index had increased by about 6%.