Oracle raised its annual revenue growth forecast on Wednesday. The company did so in the belief that demand for its cloud services will remain strong, especially from companies that use artificial intelligence. Following this announcement, the share price rose by more than 7% after trading hours.
Reuters reported this. Oracle now expects total revenue of at least $67 billion for the 2026 fiscal year, CEO Safra Catz said during a conference call after the quarterly results. With this revised forecast, annual revenue growth is approximately 16.7%. That is well above the previously predicted 15%.
According to Catz, the combined growth of cloud applications and infrastructure will rise from 24% in fiscal year 2025 to more than 40% in fiscal year 2026. Oracle Cloud Infrastructure (OCI) and its use for AI applications are contributing to this growth.
Increasing dependence on OCI
Rebecca Wettemann, CEO of analytics firm Valoir, said Oracle is right to be confident about OCI’s revenue growth. She emphasized that the use of multiple cloud environments and the increasing dependence on OCI by customers working with Oracle’s business applications are important factors. Wettemann also noted that Oracle’s decision to integrate generative AI capabilities into its cloud applications at no additional cost lowers the barriers to adoption. It also encourages innovation.
Revenue for the quarter ended May 31 was $15.90 billion, exceeding analysts’ average expectation of $15.59 billion. Oracle’s largest division, cloud services and license support, posted quarterly revenue of $11.70 billion, up 14% from last year. Excluding one-time items, fourth-quarter earnings per share came in at $1.70, compared with analysts’ estimates of $1.64.