Oracle shares whipsawed on Friday after the software company reported 30% revenue growth for the latest quarter, topping estimates, with sales fueled by strong demand for cloud infrastructure.
The stock popped after the open before later closing nearly 2% lower.
Fiscal first-quarter revenue increased to $19.35 billion, beating LSEG consensus estimates of $19.14 billion. Net income climbed 60% to $4.7 billion from $2.93 billion in the prior year.
Cloud revenue rose 62% from a year earlier to $11.6 billion, driven by a 121% jump in cloud infrastructure revenue, while cloud application revenue grew 10%.
Even with Friday's rally, Oracle is down about 20% this year on concern about the hefty amount of debt the company has raised to fund its artificial intelligence infrastructure buildout.
Oracle delivered an additional 850 megawatts of data center capacity in the quarter. It also booked over $30 billion in further AI cloud contracts, and delivered more than 300,000 graphics processing units to its AI Cloud customers.
The company guided to second-quarter revenue growth of 30% to 34%, with cloud revenue rising between 64% and 70%. It expects total revenue for the 2027 fiscal year to be at least $90 billion.
Alongside selling its flagship database software, Oracle now has $125 billion in debt as it funds an expansive buildout of data centers for AI workloads. The investment is expected to expand capacity for contracted cloud demand from customers including Nvidia, Meta, OpenAI, Advanced Micro Devices and SpaceX's AI business.
Oracle posted $5.4 billion in negative free cash flow during the quarter, versus a negative $362 million a year earlier.
A 'solid' quarter
Citi analysts reiterated their buy rating in a Friday note, saying Oracle had met expectations and "cleared the runway" for its upcoming investor day.
"Oracle delivered a solid fiscal first quarter that checked nearly every box and reinforces the bull case," the analysts wrote.
Oracle's outlook for 2027 is "modest," and the company's management framework is "conservative," the analysts said.
"Given the magnitude of fiscal first-quarter outperformance, we see a favorable setup for upward revisions at Investor Day and AI World," the analysts added.
— CJordan Novet contributed to this report
