Oracle Soars 9.2% After Blowout Earnings, Eyes AI Infrastructure Lead

Oracle's stock soared 9.2% after strong Q3 fiscal 2026 earnings, with 44% cloud revenue growth and a $553 billion backlog. The company projects 34.3% revenue growth to $90 billion by fiscal 2027. However, long-term debt increased 41.6% year-over-year to $124.72 billion, impacting profitability.

Oracle delivered a blowout Q3 fiscal 2026 earnings report, sending ORCL shares surging approximately 9.2% in after-hours trading. The company reported total revenue of $17.2 billion, up 22% year-over-year, with non-GAAP EPS of $1.79, beating analyst expectations . Cloud revenue was the standout, reaching $8.9 billion with 44% growth in USD terms, while cloud infrastructure specifically soared 84% year-over-year to $4.9 billion.

The company's remaining performance obligations (RPO) reached a staggering $553 billion, a 325% increase from the prior year . Management raised its fiscal 2027 revenue target to $90 billion, representing approximately 34.3% growth, stating Oracle can "comfortably meet and likely exceed" this figure. Deutsche Bank maintained a Buy rating on the stock, though notably cut its price target from $375 to $300.

However, the growth comes at a significant cost. Oracle reported negative free cash flow of approximately -$24.7 billion over trailing four quarters, with annual capital expenditures of $48 billion and total long-term debt reaching $125 billion. A $45-50 billion financing plan for 2026 underscores Oracle's debt-funded expansion strategy, making it the only major cloud provider funding AI infrastructure primarily through leverage. Investors may weigh the massive backlog against concentration risk, with a significant portion of the RPO attributed to a small number of large customers.