Oracle Stock Skyrockets 9% as AI Demand Fuels Record $553 Billion Backlog
Oracle shares surged as much as 10% in after-hours trading Tuesday after the company reported earnings that smashed Wall Street expectations, revealing a staggering $553 billion AI-driven contract backlog that has more than quadrupled year-over-year. The dramatic reversal comes after Oracle stock had plummeted over 50% from its September peak, marking a critical bullish pivot driven by explosive demand for its AI infrastructure services.
Oracle Earnings Beat Drives Oracle Stock Price As AI Infrastructure Booms
Oracle posted adjusted EPS of $1.79, above the $1.70 consensus, and revenue of $17.19 billion, also ahead of the $16.91 billion estimate — and that Oracle stock jump in after-hours reflected just how much the market had been bracing for disappointment. Total cloud revenue hit $8.9 billion, up 44%, and cloud infrastructure specifically brought in $4.9 billion, an 84% jump that was also faster than the 68% growth the quarter before. The Oracle stock price had been under serious pressure all year, and management also raised fiscal 2027 revenue guidance to $90 billion — a $1 billion bump above prior forecasts and well ahead of the $86.6 billion analyst consensus.
Source: Google Finance
The $553 Billion Backlog Behind the Oracle Stock Jump
The remaining performance obligations figure — $553 billion — is really what’s driving the Oracle stock jump right now, and also what makes it feel different from a one-quarter beat. Oracle AI infrastructure is at the center of it, with most of the backlog growth coming from large-scale AI contracts. On how these deals are structured and funded, Oracle stated:
“Most of the increase in RPO in Q3 related to large scale AI contracts where Oracle does not expect to have to raise any incremental funds to support these contracts as most of the equipment needed is either funded upfront via customer prepayments so Oracle can purchase the GPUs, or the customer buys the GPUs and supplies them to Oracle.”
Larry Ellison on Oracle AI Infrastructure and the SaaS Shift
On the earnings call, co-founder and executive chairman Larry Ellison had this to say:
“Thank God we have these coding tools now that allow us to build a comprehensive set of software, agent-based software, to implement, to automate a complete ecosystem like healthcare or financial services. That’s what we’re doing at Oracle. That’s why we think we’re a disruptor. That’s why we think the SaaS apocalypse applies to others but not to us.”
Layoffs, Stargate, and Oracle Stock Price Recovery
Oracle acknowledged restructuring amid reports of thousands of job cuts, framing it around AI-driven efficiency. The company stated:
“AI models for generating computer code have become so efficient that we have been restructuring our product development teams into smaller, more agile and productive groups. This new AI Code Generation technology is enabling us to build more software in less time with fewer people. Oracle is now building more SaaS applications for more industries at a lower cost.”
On the Stargate data center project in Abilene, Texas — where Bloomberg reported that Oracle and OpenAI scrapped expansion plans — Oracle pushed back directly:
“Recent media activity about the Abilene site are false and incorrect. Crusoe and Oracle are operating in lockstep to deliver one of the world’s largest AI Data centers in Abilene at record-breaking pace. Two buildings are completely operational and the rest of the campus is on track. Oracle has completed leasing for the additional 4.5GW to deliver on our commitments to OpenAI.”
The Oracle stock jump also came as Oracle pointed to its biggest AI cloud customers, noting they “” — a nod toward OpenAI’s $110 billion funding round, which Amazon and Nvidia joined as backers. Oracle plans to pour $50 billion into infrastructure for the full fiscal year, and those numbers, alongside a strong Oracle earnings beat, make the Oracle stock jump reason pretty straightforward — even as the Oracle stock price still has a long way to climb back to its September highs.
