ii view: Oracle shares soar on huge customer demand

Is this tech giant’s position as a core database software provider putting it in an enviable place under growing AI usage? We assess prospects.

10th September 2025 12:12

by Keith Bowman from interactive investor

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Photo credit: Jonathan Raa/NurPhoto via Getty Images.

First-quarter results to 31 August

Revenue up 12% to $14.9 billion
Adjusted earnings up 6% to $1.47 per share
Quarterly dividend of $0.50 per share, unchanged from the previous quarter

Chief executive Safra Catz said: “Oracle is off to a brilliant start to the full year 2026. It was an astonishing quarter - and demand for Oracle Cloud Infrastructure continues to build.

“Oracle AI Cloud Infrastructure and the Oracle MultiCloud AI Database will both contribute to dramatically increasing cloud demand and consumption over the next several years. AI changes everything.”

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ii round-up:

Oracle Corp (NYSE:ORCL)’s push to grow AI software-hosting data centre operations alongside its own renowned database software made huge steps forward over this quarter period to late August.

Quarterly customer business bookings of $355 billion (£262 billion) rose 359% from a year ago and included a major deal with OpenAI to develop sizeable data-centre capacity on which to host AI software. Oracle now expects its own data-centre related or cloud infrastructure revenues to grow to around $144 billion come 2030, up from 2025’s $10.3 billion.

Shares for the tech giant soared by around a quarter in post-results trading having come into these latest numbers up close to a half so far in 2025. The tech-heavy Nasdaq index is up by just over a tenth year-to-date, while shares for chip maker and AI play NVIDIA Corp (NASDAQ:NVDA) are up by just over a quarter during that time.

Oracle provides database software and data-centre hosting facilities for organisations. Oracle signed four multi-billion dollar contracts with three different customers to take its total Remaining Performance Obligations (RPO), a measure of contracted revenue that has not yet been recognised, to $455 billion.

Oracle expects cloud-data related revenues to grow substantially every quarter for several years as it delivers another 37 data centres to three Hyperscale partners, taking the total to 71.

Revenues for the first quarter to 31 August rose 12% to $14.9 billion with cloud-related revenues up 28% during the period to $7.19 billion. Adjusted earnings climbed 6% to $1.47 per share, missing Wall Street forecasts of $1.48 per share.

Oracle plans to launch a new cloud infrastructure service called the ‘Oracle AI Database’ to enable customers to use the Large Language Model of their choice, including Google’s Gemini and OpenAI’s ChatGPT. The large language software will sit directly on top of the Oracle Database, making it easy for customers to access and analyse all their existing data.

Second-quarter results are likely to be announced in mid-December.

ii view:

Began in 1977, Oracle pioneered the first Structured Query Language (SQL) database. Software accounted for 38% of revenues during this latest quarter. Cloud-related revenues came in at 48%, with hardware generating 5% and Services the balance of 9%. Its more than 400,000 customers include the UK’s Ministry of Defence, US retailers Walmart Inc (NYSE:WMT) and Macy's Inc (NYSE:M) and China’s retailer Temu and car maker BYD Co Ltd Class H (SEHK:1211).

For investors, expected capital expenditure or investment for the 2026 fiscal year ahead of around $35 billion is up 65% on 2025 and will offer some headwinds to earnings. The tough economic backdrop will be heightening customer desire to obtain value for money. A forecast future dividend yield of under 1% compares to an expected yield of over 2% at rival International Business Machines Corp (NYSE:IBM), while an estimated future price earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap.

To the upside, an RPO of $455 billion now underpins future revenues, with Oracle’s database a key ingredient in the corporation’s push to use AI in conjunction with their own data. A partnership with the US government is now under way under previously announced plans by President Donald Trump to invest billions of dollars in AI infrastructure across the country. The company has a wide diversity of customer types and geographical locations, while over time growth by acquisition has been successful.

In all, and while risks remain, Oracle’s ambition to be one of the world’s largest cloud infrastructure or hosting companies is arguably underpinned by its much-used database software, with investors likely to stay highly supportive.

Positives:

Product and customer sector diversity
Successful acquisition track record

Negatives:

Society concerns over AI use
Currency moves can impact

The average rating of stock market analysts:

Buy

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