Oracle’s stock jumped roughly 36% on Wednesday after the company told investors its remaining performance obligations, contracted cloud revenue not yet booked, hit $455 billion, up 359% from a year earlier. The one-day gain was Oracle’s largest since 1992 and added more than $250 billion to its market value.
What did Oracle tell investors about its cloud backlog?
Chief executive Safra Catz told analysts on the earnings call that Oracle signed four multibillion-dollar contracts with three separate customers during the quarter and expects to add several more in the coming months. Catz said the company’s remaining performance obligations are likely to exceed half a trillion dollars in the near term, calling the pace of bookings unlike anything Oracle has seen before.
Catz pointed to contracts with what she described as “the who’s who of AI,” naming OpenAI, xAI, Meta, Nvidia and AMD among the customers now buying capacity on Oracle’s cloud infrastructure. Oracle has spent the past two years retooling its data center business to compete for the computing contracts that AI developers need to train and run large models, a shift that had drawn skepticism from some investors before this quarter’s numbers.
How did the results affect Larry Ellison’s fortune?
The rally pushed Oracle co-founder and chairman Larry Ellison’s net worth up by an estimated $100 billion in a single day, putting him ahead of Tesla chief executive Elon Musk on real-time wealth rankings. Ellison, who returned to a more active role in Oracle’s cloud strategy in recent years, has staked much of the company’s growth story on winning AI infrastructure business away from larger rivals.
Oracle’s fiscal first quarter covers the three months through August. The company said total cloud revenue is on pace to keep accelerating as the newly signed contracts begin converting into recognized revenue over the next several fiscal years.
Sources: Yahoo Finance · TipRanks · Oracle Investor Relations
