By Juby Babu and Stephen Nellis<\/p>\n
March 10 (Reuters) – Oracle on Tuesday predicted that the AI data center boom will power its revenue above Wall Street estimates well into \u200c2027, sending its shares up 8% in extended trading.<\/p>\n
The results help to allay investor \u200cconcerns that Oracle’s costly multi-billion dollar push into AI computing would not generate profits quickly enough.<\/p>\n
Remaining performance obligations (RPO), a key \u200bindicator of future contracted revenue, grew 325% from last year to $553 billion, ahead of the $540.37 billion estimate from four Visible Alpha analysts.<\/p>\n
Most of the increase in RPO in the quarter is related to large-scale AI contracts where Oracle “does not expect to have to raise any incremental funds,” the company said in a \u200cstatement.<\/p>\n
The company also raised its revenue \u2060forecast for fiscal 2027 to $90 billion, above analyst estimates of $86.6 billion, according to LSEG-compiled data.<\/p>\n
“Oracle’s quarter is a beat and a stress test result for \u2060the AI trade,” said eMarketer analyst Jacob Bourne. “As the most debt-exposed major player in AI infrastructure, Oracle is the canary in the coal mine and this report suggests there\u2019s underlying health in AI spending beyond the \u200bhype.”<\/p>\n
Long \u200bknown for its database software and enterprise applications for \u200bfinance, Oracle in recent years has repositioned itself \u200cas a cloud computing infrastructure competitor after recruiting key executives from rivals.<\/p>\n