Oracle's earnings are poised for a rebound after Q3 2025, driven by several key factors:
- Strong Backlog and Growth Outlook: Oracle's large sales backlog, which has increased by 63% (in constant currency) to over $130 billion1, is a testament to its strong demand position. The company expects this backlog to drive a 15% increase in revenue in its next fiscal year beginning in June 20261. This growth outlook is underpinned by robust demand for its AI cloud services.
- AI Cloud Demand: The company's cloud infrastructure revenue has seen a significant boost from artificial intelligence demand, with a 51% increase reported1. Oracle's strategic expansion into AI cloud services, including investments in data centers and semiconductor technology, is well-positioned to capitalize on the growing AI market2.
- Fiscal 2026 Revenue Forecast Increase: Oracle has raised its fiscal 2026 revenue guidance to at least $66 billion3, which is above analysts' expectations. This optimistic forecast reflects confidence in its growth trajectory, particularly in its cloud services.
- Historical Performance: Oracle has consistently exceeded earnings expectations, with adjusted EPS growing by 24.2% year-over-year in the latest reported quarter4. This track record suggests that a rebound in earnings after Q3 2025 is a reasonable expectation.
- Market Position and Partnerships: Oracle's market position as a leading database and application software provider, coupled with strategic partnerships with major cloud providers, positions it well for continued growth4. The company's cloud infrastructure revenue has already shown strong year-over-year growth1.
In conclusion, while Oracle's Q3 2025 earnings may not yet reflect the full potential of its growth drivers, the company's strong backlog, strategic positioning in the AI cloud market, and optimistic future outlook indicate that its earnings are likely to rebound in the coming fiscal year.