Oracle’s AI-Powered Cloud Surge: Why the Future of Computing Just Changed

Oracle's recent performance in the cloud computing sector, driven by strong AI infrastructure growth and high demand for its GPU capabilities, has positioned the company as a formidable player in the global cloud market. The company now forecasts $18 billion in cloud infrastructure revenue for fiscal 2026, with expectations to reach $32 billion, $73 billion, $114 billion, and $144 billion in the subsequent four years. This upward revision was underscored by Oracle's fiscal first-quarter results, which, despite missing top- and bottom-line expectations, were overshadowed by robust AI-related momentum and a growing backlog of contracts.

The surge in Oracle’s cloud infrastructure revenue is attributed to its ability to secure access to high-performance Nvidia GPUs, a critical component for AI computing. This has enabled the company to capitalize on the rapidly expanding market for AI infrastructure and support large-scale data processing needs. Oracle CEO Safra Catz highlighted the company's success in securing several multi-billion-dollar contracts during the recent quarter, signaling confidence in continued growth. She added that the company expects to sign additional major clients in the coming months.

Analysts have responded positively to Oracle's performance, with many calling the results "exceptional" and a "momentous confirmation" of the AI trade. Deutsche Bank analysts described the results as "truly awesome," emphasizing Oracle’s leadership in AI infrastructure. Bank of America analysts upgraded Oracle’s stock to "buy" from "neutral," noting that the company’s backlog of contracts reinforces its position as a key enabler of AI workloads.

Oracle's AI ambitions extend beyond infrastructure. The company plans to launch a new service called the "Oracle AI Database," which will allow customers to use top AI models, including OpenAI's ChatGPT, xAI's Grok, and Google's Gemini, directly within the Oracle Database. Larry Ellison, Oracle’s co-founder and CTO, emphasized that AI will drive significantly greater cloud demand and consumption in the years ahead, stating, “AI changes everything.” The company has also indicated it will provide more details on its AI and financial strategies at an upcoming event.

The financial performance of Oracle’s stock has reflected this momentum, with shares surging over 25% in after-hours trading following the latest results announcement. Over the course of 2025, the stock has gained nearly half its value, largely driven by strong quarterly reports and revised growth projections. The positive sentiment appears to have contributed to Larry Ellison briefly surpassing Elon Musk as the world’s richest person, highlighting the growing influence of cloud computing and AI in the global economy.