And the outlook is even brighter.
Pioneering technology company Oracle (NASDAQ:ORCL) has had a resurgence in recent years, spurred by the growing demand for its AI cloud data storage services.
On Wednesday after the market closed, Oracle released impressive results for its fiscal fourth quarter and full fiscal year, sparking a rally that saw the stock price jump 15%.
Oracle, which launched in 1977, is still led by the same man who founded it, Larry Ellison. In the most recent quarter, Oracle generated $15.9 billion in revenue, an 11% increase over the same quarter a year ago. The haul beat estimates of $15.5 billion.
Net income increased 9% year-over-year to $3.4 billion, or $1.19 per share. Adjusted net income was $4.9 billion, or $1.70 per share, up 6% year-over-year. This beat analysts’ estimates of $1.64 per share.
Oracle generates most of its revenue, about 74%, from its cloud services business. In the fourth quarter, cloud services made $11.7 billion in revenue, up 14% from the same quarter a year ago and beating estimates.
Within Oracle’s cloud division, cloud infrastructure revenue rose 52% to $3 billion, while cloud application revenue jumped 12% to $3.7 billion. Also, multi-cloud database revenue from Amazon, Google and Azure spiked 115% in the quarter. Further, cloud license and on-premise license made $2 billion in revenue in the quarter, up 9%, while hardware was up 1% to $850 million and services dropped 2% to $1.3 billion in revenue.
Huge spike in cloud services expected
The quarterly numbers were strong, but what really got investors excited was Oracle’s growth prospects. It has inked some major deals in recent months, partnering with OpenAI on the $500 billion Stargate initiative to build AI data centers throughout the U.S. It also announced a deal with the Cleveland Clinic and G42 to build an AI-based healthcare delivery platform.
These and other deals are fueling Oracle’s massive growth prospects.
“FY25 was a very good year—but we believe FY26 will be even better as our revenue growth rates will be dramatically higher,” Oracle CEO Safra Catz said. “We expect our total cloud growth rate—applications plus infrastructure—will increase from 24% in FY25 to over 40% in FY26.”
Further, Catz said the cloud Infrastructure business is expected to see 70% growth in fiscal 2026, up from 52% growth in the last fiscal year. And remaining performance obligations (RPO), which essentially its pipeline, is anticipated to grow by 100% in the new fiscal year. In the last fiscal year, the RPO was up 41% to $138 billion.
Booming growth in multicloud revenue
In addition, Oracle expects more growth in multicloud revenue, which refers to partnerships it has with other cloud providers that allows its customers to run Oracle systems on their platforms.
“We currently have 23 MultiCloud datacenters live with 47 more being built over the next 12 months. We expect triple-digit MultiCloud revenue growth to continue in FY26,” Ellison, now the chairman and CRO of Oracle, said.
Ellison added that revenue from its 29 Oracle datacenters grew 104% last year. This year it expects to build another 30 Oracle datacenters.
“Overall Oracle Cloud Infrastructure consumption revenue grew 62% in Q4,” said Ellsion. “We expect OCI consumption revenue to grow even faster in FY26. OCI revenue growth rates are skyrocketing—so is demand.”
Oracle stock got some massive upgrades after this bullish outlook. Deutsche Bank boosted its target by $40 per share to $240 per share and BofA raised it by $64 to $220 per share, to name just two of about a dozen price target raises.
Oracle stock is up about 20% YTD and has urged roughly 43% over the past year. It has a reasonable forward P/E of 25, which looks pretty good when you consider its massive growth outlook. Oracle looks like it could have more room to run.
