Oracle shares rose 5.5% in premarket trading on Friday as a consequence of better-than-expected fiscal first-quarter earnings that allayed Wall Street's worries about the company's aggressive, debt-driven AI data centre buildouts.
The company's booking of over $30 billion in new AI cloud contracts was a major factor in the jump, pushing its remaining performance obligations (backlog) to a record $664 billion, comfortably exceeding analyst projections of $639.89 billion.
According to data from Visible Alpha, the Austin, Texas-based company booked more than $30 billion in incremental AI cloud contracts in the first fiscal quarter, reported Reuters.
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Oracle shares are rising from their regular session finish of $152.94 to almost $163.00 in pre-market and early trading. Following the company's impressive fiscal Q1 2027 earnings, which exceeded Wall Street projections on both the top and bottom lines, there has been a dramatic change in momentum.
Oracle's positive results come after a period of underperformance as the company struggles to keep up with hyperscale competitors, raising questions about when its enormous AI spending will pay off due to increasing debt and constrained cash flows.
According to J.P. Morgan analysts, the findings should answer important investor worries such as whether Oracle's backlog growth can be sustained, its translation into revenue amid data centre delays, and the requirement for additional capital raises.
Its shares have dropped more than 21% so far this year, while the benchmark S&P 500 index has increased by around 11%.
If gains continue, Oracle is expected to increase its market value by around $24 billion at the current share price of $161.3.
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According to data gathered by LSEG, the stock trades at 16.86 times its forward earnings expectations, compared to Microsoft's 23.84 multiple and Amazon's 22.58.
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