Oracle Corp (NYSE:ORCL) stock fell as investors reacted to aggressive infrastructure spending plans after the company reported its fourth-quarter results and gave its capital outlay plans.

The tech giant’s shares dipped following the disclosure that fiscal year 2027 net capital expenditures are projected to climb to around $70 billion to fuel massive AI demand.

Earnings Highlights

Oracle reported revenue of around $19.18 billion, beating estimates of approximately $19.10 billion, according to Benzinga Pro.

Revenue rose 21% year over year (Y/Y), driven by robust performance across cloud infrastructure and cloud applications.

Adjusted operating income grew 22% Y/Y to $8.6 billion, benefiting from strong top-line growth and operational leverage.

Adjusted earnings grew 24% year-over-year to $2.11 per share, beating analyst estimates of $1.96 per share. 

Operating cash flow reached $32 billion, representing 54% Y/Y growth, while the company invested heavily in expansion with $48 billion in net capital expenditures in the year.

Other Key Metrics

Remaining Performance Obligations (RPO) surged to a record $638 billion, up 363% Y/Y in the quarter.

Management noted that about 12% of RPO is expected to convert into revenue within the next 12 months, with an additional 34% expected over the following 13–36 months.

During the quarter, Oracle signed $67 billion in AI infrastructure contracts, bringing total bring-your-own-hardware and prepaid infrastructure agreements to approximately $75 billion.

At the company conference call, CFO Hilary Maxson said, "We'll continue those investments in our fiscal year 2027 with an expected net cash outlay for capital expenditures of around $70 billion. This includes customer prepayments and timing impacts expected at around 20 to 25 billion dollars, so our reported CAPEX will be higher by this amount. Importantly, these investments are being driven by committed customer demand reflected in our record RPO, giving us confidence in our long-term outlook as well as strong returns on the capital we're deploying.”

Segment Performance

OCI revenue nearly doubled, rising 93% Y/Y, as demand for AI computing capacity and database services continued to accelerate.

Cloud Applications revenue reached $4.1 billion, up 10%, while SaaS deferred revenue increased 16% from the prior year.

The company's cloud database business expanded 29%, with multi-cloud revenue jumping 404% and multi-cloud bookings climbing 325% year over year.

Over the past 12 months, Oracle has deployed more than 1,000 AI agents across its application portfolio and has begun introducing AI token-based and outcome-based pricing models.

Outlook

For the first quarter, Oracle forecasts adjusted EPS of $1.72–$1.76, above the $1.68 consensus estimate, and revenue of $18.96–$19.26 billion, compared with expectations of approximately $19.06 billion.

Total cloud revenue is expected to grow between 57% and 63% in the quarter.

Oracle affirmed its fiscal 2027 revenue outlook of $90 billion versus estimates of approximately $88.90 billion and adjusted EPS of $8.05 versus estimates of $8.01.

Meanwhile, the company expects gross margins to decline in fiscal 2027 as data center expansion and infrastructure buildouts ramp up.

Oracle noted that it expects its new AI patient care management system to push the growth rate of the overall Oracle Health business to double-digits in fiscal 2027.

Also, the company announced it expects to raise approximately $40 billion through a combination of debt and equity financing, including its previously announced $20 billion at-the-market equity issuance.

Collaboration With OpenAI

In a separate release yesterday, Oracle disclosed a new partnership with OpenAI. Enterprises will soon be able to apply eligible Oracle Universal Credits to access OpenAI's frontier models and Codex through OCI, aiming to keep AI deployments inside familiar procurement and governance workflows.

The companies said availability begins "in the coming weeks," with customers directed to Oracle sales for timing and eligibility.

ORCL Price Action: Oracle shares were down 8.42% at $184.31 during premarket trading on Thursday, according to Benzinga Pro data.

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