Oracle Q1 Revenue Up 12% Despite Earnings Miss, AI Contracts Drive $455B Backlog

Oracle reported first-quarter fiscal 2026 revenue of $14.93 billion, a 12% increase year-over-year, but slightly missed Wall Street's revenue and adjusted earnings per share expectations, posting $1.47 versus the anticipated $1.48. Despite this, Oracle's remaining performance obligations (RPO), a key indicator of contracted future revenue, surged 359% to $455 billion, largely driven by a $30 billion deal with OpenAI and the ongoing Stargate data center and AI infrastructure project announced by President Donald Trump. Cloud revenue grew 28% to $7.2 billion, with Oracle Cloud Infrastructure (OCI) revenue up 55%, reflecting strong demand fueled by AI-related workloads and strategic partnerships with companies like AWS and Google Cloud. CEO Safra Catz highlighted the signing of four multibillion-dollar contracts, including with xAI and a hyperscaler, and projects OCI revenue to rise substantially over the next five years, with much of this growth already booked in RPO. While GAAP net income slightly declined due to higher operating expenses tied to data center expansion, investor sentiment was positive, driving a 10% stock jump post-earnings. Oracle's positioning in the AI infrastructure market is strengthening as it leverages cloud services and Nvidia's GPUs to capitalize on the AI boom and expand its customer base, including talks with Skydance Media following its Paramount Global acquisition.