Oracle anticipates that the AI data center surge will propel its revenue beyond Wall Street projections well into 2027. This outlook, revealed on March 10, 2026, resulted in an 8.3% jump in Oracle's shares during extended trading. The company's strategy involves building new AI datacenters and saw its remaining performance obligations (RPO) — a measure of contracted future revenue — increase by 325% year-over-year in Q3 to $553 billion, surpassing analyst expectations. By the end of Q4 2026, RPO further surged to $638 billion, representing a 363% year-over-year increase.
Oracle's robust RPO growth is largely due to significant AI contracts, many of which involve customers prepaying for GPUs or supplying their own hardware. This approach, where prepaid and customer-supplied hardware totals $75 billion, significantly reduces the capital Oracle needs to raise for its AI datacenter expansion. For fiscal year 2026, Oracle spent approximately $55.7 billion on capital expenditures for datacenters, exceeding its initial guidance of $50 billion. The company now expects to spend around $70 billion in net capital expenditure in fiscal year 2027.
The company has also affirmed its total revenue guidance of $90 billion for fiscal year 2027 and raised its non-GAAP EPS guidance to $8.05. Oracle's cloud infrastructure revenue, directly linked to AI workloads, grew 93% to $5.8 billion in Q4 2026, with full fiscal year cloud infrastructure revenue reaching $18.1 billion, a 77% increase. Analysts like Morningstar have significantly raised their fair value estimate for Oracle to $330 from $205, citing the company's strong relationships with AI firms and its involvement in projects like Stargate.
