Oracle shares rose after the company beat Wall Street's fiscal first-quarter 2027 estimates and raised its full-year guidance, driven by a surge in cloud infrastructure revenue and more than $30 billion in new AI contracts. Wall Street's reaction stayed mixed, with Morgan Stanley flagging gross-margin pressure while JPMorgan and KeyBanc pointed to stronger bookings and data-center delivery.
Oracle shares rose 6% in premarket trading Friday after the cloud and software group delivered a solid quarter and lifted its earnings and revenue forecasts. The stock had already popped roughly 7% in after-hours trading once the fiscal first-quarter 2027 results landed.
Cloud revenue and contracts drive the beat
Adjusted earnings per share came in at $1.92, ahead of the $1.74 consensus estimate and up 30% from the same period last year. Revenue hit $19.35 billion, also up about 30% year-over-year and above the $19.14 billion analysts had expected. Cloud infrastructure revenue surged 121% to $7.4 billion in the quarter. Total cloud revenue, which includes software-as-a-service alongside infrastructure, climbed 62% to $11.61 billion. Oracle also booked more than $30 billion in new AI cloud contracts during the quarter. That pushed remaining performance obligations to a record $664 billion, up $209 billion year-over-year.
Analysts weigh in on margins and delivery
Morgan Stanley analysts led by Sanjit Singh pointed to pressure on Oracle's gross margin and a modest bump in 2027 earnings-per-share guidance, and said they want more stabilization of gross margin along with details on when new data centers will be running. They will be watching for updates at Oracle's analyst day expected in late October.
JPMorgan analysts led by Samik Chatterjee took a more positive view, saying the August quarter eased key worries around data-center delays and the value of signed contracts not yet converted to revenue. They noted 850 megawatts of AI compute were delivered in the quarter, three times the entire fourth quarter, alongside steady operating margins from cost discipline. According to KeyBanc Capital Markets analysts led by Jackson Ader: "We got both better in-period execution and future-period bookings than anticipated. Check and check." They said the 850 megawatts of data coming online pushes back at fears that data-center project delays could hit near-term revenue recognition.
Guidance points higher
Oracle raised its full-year fiscal 2027 guidance, now projecting at least $90 billion in revenue and adjusted EPS of $8.10, a slight bump from its earlier $8.05 forecast. For the second quarter, the company guided for revenue growth of 30% to 34%.
Oracle's move tracks a broader rally in the stock market tied to AI infrastructure spending, though Wall Street's mixed reviews show the gains still come with caveats attached.
Sources: MarketWatch, Crypto Briefing
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