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Investing.com - Shares in Oracle (NYSE:ORCL) surged in extended hours trading after the cloud-computing group lifted its annual revenue growth target and highlighted solid demand from clients aiming to harness artificial intelligence.
Oracle CEO Safra Catz told investors in a post-earnings call on Wednesday that total revenue in its 2026 fiscal year is expected to be at least $67 billion, implying yearly growth of roughly 16.7%.
The company had previously guided for an increase of 15%.
"We’re all thinking it: these are just targets, let’s see if Oracle can actually hit them," strategists at KeyBanc said in a note to clients, flagging that the firm’s previous fiscal year did not "live up to the initial growth hopes."
They added that while "[t]his is true, and we completely understand any investor skepticism, [...] we maintain that you do not have to believe the Company’s initial statements in order for the Company to deliver upside to numbers in the interim."
Catz noted that its annual total cloud growth rate, which includes "applications plus infrastructure," will also rise to over 40% from 24% in the 2025 fiscal year, bolstered mostly by solid returns from its Oracle Cloud Infrastructure solution business and clients’ need to support AI workloads.
Analysts at Vital Knowledge called the prospects for Oracle’s growth "amazing," but noted that "meeting that demand is eating up a lot of cash" and contributing to an elevated projection for annual capital expenditures.
In its fiscal fourth quarter, Oracle reported adjusted per-share income of $1.70 on revenue of $15.9 billion, compared to Wall Street expectations for $1.64 on revenue of $15.58 billion.
Oracle Cloud Infrastructure’s revenue grew 62%. Remaining performance obligations, a gauge of booked revenue, climbed by 41% to $138 billion -- an uptick that analysts at Jefferies said highlights the "breadth of the AI buildout]."
(Yasin Ebrahim contributed reporting.)