Oracle renewed or resold all of its expiring GPU capacity at prices roughly 20% higher than prior contracts, even though most of that hardware is over four years old. The company disclosed the pricing power during its Q1 FY2027 earnings call, alongside a jump in AI cloud bookings and a raised full-year revenue outlook.
Oracle renewed or resold its entire book of expiring GPU capacity at prices roughly 20% higher than prior contracts, the company said during its Q1 FY2027 earnings call. Most of that hardware is over four years old, yet a tight supply of new chips is letting Oracle charge a premium on aging fleets.
GPU demand keeps outrunning supply
Oracle's GPU utilization rate hit 97.9% during the quarter. The company also booked more than $30 billion in new AI cloud contracts, pushing remaining performance obligations to $664 billion — up $26 billion from the prior quarter and $209 billion from a year earlier.
Oracle delivered more than 300,000 GPUs to its AI cloud customers during the quarter, tripling the output from Q4 FY2026. It also brought an additional 850 megawatts of AI capacity online. The client list spans OpenAI, xAI, Meta, Nvidia, and AMD.
Why old chips still command a premium
The AI industry faces an acute shortage of new Nvidia GPUs, a bottleneck that has rippled through every major cloud provider. Oracle's strategy exploits that mismatch: customers who locked in capacity years ago at lower rates now find that walking away means entering a market where replacement capacity may not exist at any price. Renewing at a 20% markup looks like a bargain next to losing access entirely.
Oracle raises its outlook
Buoyed by the results, Oracle raised its full-year FY2027 revenue guidance to at least $90 billion, representing 34% year-over-year growth. The company also lifted its non-GAAP earnings-per-share outlook to $8.10.
Source: Crypto Briefing
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