Oracle concept stocks surged 7.58% after hours: Why did this performance trigger the market this time?

Recently, US stocks related to AI continued to rise, with leading companies such as Microsoft (MSFT.US), NVIDIA (NVDA.US), TSMC (TSM.US), and Broadcom (AVGO.US) all advancing collectively. During this rally, Oracle (ORCL.US) also made a strong move, with its stock price turning from decline to increase after hours, ultimately rising by 7.58%. What is driving this surge behind the scenes?

Quarterly Earnings Surpass Expectations, Cloud Business as the Absolute Main Player

After the US market closed on Wednesday, Oracle released its financial report for Q4 of fiscal year 2025 (ending May 31). Data shows that revenue for the quarter reached $15.90 billion, an 11% year-over-year increase, outperforming analyst expectations; GAAP net profit was $3.43 billion (up 9% YoY), while non-GAAP net profit reached $4.88 billion.

In terms of earnings per share, non-GAAP EPS was $1.70, exceeding market expectations. Additionally, the board of directors announced a quarterly cash dividend of $0.50 per share, sending a strong signal of confidence to shareholders.

However, the most impressive data comes from the business structure. Oracle’s core cloud services and support licensing division achieved $11.70 billion in revenue in Q4, a 14% increase YoY. More critically, total cloud revenue (IaaS plus SaaS) grew 27% YoY to $6.7 billion, accounting for 42% of total revenue, indicating that cloud business has become the company’s primary growth engine.

Among them, cloud infrastructure (IaaS) revenue reached $3.0 billion, a 52% increase YoY. Although slightly below expectations, it still demonstrated strong growth momentum.

Order Backlog Reaches $138 Billion, Future Performance Highly Certain

In the financial report, Oracle disclosed a key indicator—Remaining Performance Obligations (RPO)—which increased significantly by 41% YoY to $138 billion. This data is highly significant because the rapid growth of RPO indicates that Oracle holds ample order reserves, laying a solid foundation for future performance growth.

Larry Ellison, Oracle’s Chairman and CTO, revealed in the report that multi-cloud database revenue from Amazon, Google, and Azure surged 115% from Q3 to Q4. Currently, the company operates 23 multi-cloud data centers, with plans to build 47 more in the next 12 months. These additional capacities will further enhance market share.

Strong Guidance for FY2026, Cloud Revenue Growth Expected to Exceed 40%

For FY2026, Oracle CEO Safra Catz issued a series of encouraging guidance during the earnings call.

In local currency, total revenue for Q1 of FY2026 is expected to grow 12%-14%, with cloud service revenue projected to grow between 26%-30%. Non-GAAP EPS is expected to increase by 4%-6%, ranging from $1.40 to $1.48.

More notably, the full-year guidance projects FY2026 revenue to exceed $67 billion, representing over 16% growth for the fiscal year. Regarding cloud business, total cloud revenue is expected to grow over 40% YoY, with cloud infrastructure (OCI) revenue potentially increasing over 70%. The most exciting part for the market is that RPO is expected to grow over 100% in FY2026, undoubtedly providing room for sustained future growth.

Ellison further added that triple-digit growth in multi-cloud revenue will continue into FY2026, and Oracle Cloud@Customer’s dedicated data center revenue increased 104% YoY. Currently, 29 are online, with 30 more to be added in FY2026. Overall OCI consumption revenue grew 62% YoY in Q4, and the growth rate is expected to accelerate further in FY2026.

Capital Expenditures Surge to $25 Billion, Preparing for Capacity Expansion

It is worth noting Oracle’s aggressive stance on capital expenditure. FY2025 capital spending exceeded $21 billion, more than tripling the less than $7 billion in FY2024. Looking ahead to FY2026, capital expenditure will further rise to over $25 billion.

Catz admitted that the surge in capital spending mainly stems from capacity pressures caused by order backlog. Behind this massive investment is Oracle’s optimistic outlook on market demand, and it also indicates that the company is fully preparing for rapid cloud expansion. The growth rate of OCI is accelerating, and demand remains strong, further validating Oracle’s rising competitiveness in the cloud computing field.

After hours, the stock price soared by 7.58%, undoubtedly a “vote of confidence” from the market in Oracle’s earnings report and future outlook.