How Oracle Is Becoming an AI Giant
Oracle ($ORCL) just delivered one of the most eye-catching market moves of 2025. After posting fiscal Q1 2026 earnings, the stock surged nearly 40% in a single day — its biggest one-day jump since 1992. For a company with a market cap north of $300 billion, such a move is rare. The rally instantly added more than $200 billion in value, pushed Oracle closer to the trillion-dollar club, and boosted co-founder Larry Ellison’s net worth by about $100 billion overnight.
Why the Huge Reaction?
The answer lies in the market’s hottest trend: artificial intelligence. Investors recognized that Oracle has positioned itself as a backbone of the AI era. The company reported that booked revenue for Oracle Cloud Infrastructure (OCI) is expected to surpass $500 billion in the near future, with remaining performance obligations — contracted but not yet recognized revenue — up 359% to $455 billion.
Oracle’s Expanding Role in AI
AI was the centerpiece of Oracle’s message this quarter. Chairman and CTO Larry Ellison underscored it with a simple line: “AI changes everything.”
Here’s how Oracle is framing its role in the AI boom:
1. Oracle AI Database
At next month’s Oracle AI World, the company will launch the Oracle AI Database, a new cloud service that lets customers run the large language model (LLM) of their choice — including Google’s Gemini, OpenAI’s ChatGPT, or xAI’s Grok — directly on top of Oracle Database. This allows existing enterprise clients to apply advanced AI reasoning to their data without migrating it elsewhere, unlocking instant new value.
2. AI-Ready Cloud Infrastructure
Oracle Cloud Infrastructure (OCI) is being scaled aggressively. CEO Safra Catz unveiled a revised growth roadmap: OCI revenue is projected to rise 77% this fiscal year to $18 billion, then expand to $32 billion, $73 billion, $114 billion, and $144 billion over the next four years. She emphasized that most of this growth is already “booked” within the company’s RPO.
3. Multi-Cloud AI Partnerships
Oracle is also deepening multi-cloud ties. Ellison highlighted that multi-cloud database revenue from Amazon, Google, and Microsoft grew 1,529% in Q1. To support demand, Oracle is building 37 new data centers for hyperscaler partners, bringing its global footprint to 71 regions. This dual role — as competitor and collaborator — gives AI customers flexibility to use Oracle’s services alongside other cloud providers.
Together, these moves reflect Oracle’s strategy: combine its core database strength with AI-specific infrastructure to capture surging demand for computing power.
The AI-Driven Outlook
Catz said the scale of Oracle’s recent RPO growth allowed the company to “make a large upward revision” to its cloud plan. She expects more multi-billion-dollar contracts soon, with AI-related demand fueling growth for years.
Ellison added that both Oracle AI Cloud Infrastructure and the new Multi-Cloud AI Database will “dramatically increase cloud demand and consumption over the next several years.” He called these services revolutionary because they allow Oracle’s vast database customer base to integrate their data directly with cutting-edge AI models.
Meanwhile, the board maintained Oracle’s quarterly dividend at $0.50 per share, signaling a balance between cloud investment and shareholder returns.
Bottom Line
Oracle’s Q1 FY2026 results mark more than steady growth — they highlight a structural shift in its positioning. Massive long-term contracts, a sharply revised cloud roadmap, and AI-specific services are placing Oracle at the center of the AI economy.
The market reaction — its largest single-day stock gain in over three decades — shows growing recognition that Oracle is no longer just a legacy database company. It is now a cloud and AI powerhouse with the backlog, infrastructure, and financial plan to capture the next wave of technology demand.
This article is for informational purposes only and is not investment advice or a solicitation to buy or sell securities. The content is based on publicly available information and reflects the author’s opinions as of the publication date, which may change without notice. All investments carry inherent risks, including the potential loss of principal, and past performance is not indicative of future results. Readers should conduct their own research or consult a financial advisor before making investment decisions. BBAE holds no position in the securities mentioned, nor are they compensated by the companies mentioned.
