Key Highlights
- Oracle delivered Q4 revenues totaling $19 billion, marking a 21% year-over-year increase, with cloud services surging 47% to approach $10 billion.
- Shares tumbled 11% following the earnings announcement; Morningstar revised its fair value down to $207 from $220.
- The enterprise software giant intends to deploy $90–$95 billion in capital spending during FY2027, significantly higher than FY2026’s $56 billion.
- BMO Capital upgraded its price objective to $220 while maintaining its Outperform stance following the quarterly results.
- Oracle increased its FY2027 adjusted earnings per share forecast to $8.05, representing an 18% growth compared to analyst consensus of $8.01.
Oracle delivered impressive fiscal fourth-quarter results, yet the enormous investment required to fuel its artificial intelligence strategy spooked Wall Street. Shares plunged 11% after the June 10 earnings announcement as market participants grappled with the implications of a $90–$95 billion capital spending blueprint on future cash generation.
Quarterly revenues reached $19 billion, representing a 21% climb from the prior year. Cloud services stole the spotlight, posting a 47% surge to approximately $10 billion. Oracle Cloud Infrastructure, commonly known as OCI, expanded an impressive 77% year-over-year.
GPU usage throughout Oracle’s worldwide data center infrastructure reached 97.5% during the fourth quarter. Among these graphics processing units, existing clients renewed 92%, while newcomers absorbed the remaining 8% within a three-month window.
Oracle activated more than 1.2 gigawatts of data center infrastructure throughout fiscal 2026. The company’s most significant initiatives are tracking according to plan or exceeding timelines.
Capital Expenditure Concerns
The attention-grabbing element wasn’t the revenue performance — it was the investment roadmap. Oracle allocated $56 billion toward capital projects in FY2026 and now anticipates this number will escalate to $90–$95 billion throughout FY2027.
Morningstar analyst Luke Yang reduced the fair value projection to $207 per share from $220. The adjustment stemmed primarily from those heightened capital expenditure projections squeezing anticipated free cash flows.
The research firm maintained its three-star “fairly valued” classification on the equity. Morningstar highlighted Oracle’s financial position will be stretched near capacity, with approximately $30 billion in capital deployment anticipated to absorb the majority of cash from operations.
Oracle intends to finance the expansion through $20–$25 billion in advance customer payments, $40 billion via fresh debt and equity offerings, and the balance of $30 billion from operational cash generation.
Wall Street Perspectives
Not all analysts turned cautious. BMO Capital analyst Keith Bachman increased his price objective to $220 from $200 on June 11, preserving an Outperform classification. He anticipates Oracle’s profitability will strengthen in FY2027 as operational expenses decline.
Oracle confirmed its FY2027 revenue projection of $90 billion and elevated its adjusted earnings per share guidance to $8.05, marking an 18% advance from the previous year. Analysts had been modeling $8.01 in EPS and $88.9 billion in revenues.
The technology company also reiterated its extended-term objectives: revenue compound annual growth exceeding 31% and EPS compound annual growth surpassing 28% through FY2030.
Morningstar anticipates cloud services will constitute approximately 85% of Oracle’s aggregate revenue by FY2030, with OCI expanding at a five-year compound annual growth rate of 62%.
The $90–$95 billion FY2027 capital expenditure initiative is projected to deliver nearly 3 gigawatts of additional GPU cloud infrastructure, which Morningstar calculates could generate more than $30 billion in recurring annual revenue at full deployment.
Oracle’s collaboration with Bloom Energy was noted as providing relief for immediate power availability challenges at its computing facilities.
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