Shares of Oracle (ORCL) rose over 18% in after-hours trading. The upside came despite the artificial intelligence (AI) infrastructure company reporting lower-than-expected results for its first quarter of Fiscal Year 2026.
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Earnings per share climbed 6% year-over-year to $1.47, but came just below analysts’ consensus estimate of $1.48 per share. Further, sales increased by 11% year-over-year to $14.9 billion. This also missed analysts’ expectations of $15.04 billion.
However, one standout figure was a 359% surge in remaining performance obligations (RPO) to $455 billion, signaling strong demand for Oracle’s cloud infrastructure.
Cloud Momentum Surges
During the first quarter, Cloud segment’s revenue soared 28% to $7.2 billion, now accounting for about 48% of Oracle’s total sales. CEO Safra Catz attributed the growth to four multi-billion-dollar contracts signed in Q1.
Further, Chairman and CTO Larry Ellison highlighted Oracle’s 1,529% growth in MultiCloud database revenue, driven by partnerships with Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT).
Looking ahead, he teased the launch of the Oracle AI Database at next month’s Oracle AI World. The new service will allow customers to run large language models such as ChatGPT, Gemini, and Grok directly on Oracle databases.
Is Oracle a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 23 Buys and 12 Holds assigned in the past three months. Further, the average ORCL price target of $257.90 per share implies 6.77% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
