TLDR
- Oracle stock surged 32% in June driven by strong Q4 cloud infrastructure growth of 52% to $3 billion
- Company’s backlog (remaining performance obligations) jumped 41% to $138 billion, indicating strong future demand
- Oracle secured a massive cloud services agreement worth over $30 billion annually starting in 2028, reportedly with OpenAI
- OpenAI agreed to lease 4.5 gigawatts of data center power from Oracle as part of the Stargate project
- Wall Street maintains Moderate Buy rating with average price target of $216.65, though stock has already gained 38% year-to-date
Oracle’s stock has been on a tear, climbing 32% in June alone as the database giant continues to prove it can compete with the big cloud players. The company’s transformation from legacy software to AI-powered cloud infrastructure is paying off in a big way.
The momentum started with Oracle’s fiscal fourth quarter earnings report. Revenue hit $15.9 billion, beating analyst expectations of $15.59 billion. Overall growth of 11% might seem modest, but the real story was in the cloud numbers.
Cloud infrastructure revenue exploded 52% to $3 billion. That’s the kind of growth that gets investors excited, especially when it’s coming from AI-related demand. Oracle may still be smaller than Amazon, Google, and Microsoft in cloud computing, but it’s growing faster than all of them.
The company’s adjusted earnings per share rose from $1.63 to $1.70, topping estimates of $1.64. But what really caught Wall Street’s attention was the backlog figure. Oracle’s remaining performance obligations jumped 41% to $138 billion.
That backlog number is huge because it shows what’s coming down the pipeline. It’s basically money already committed by customers for future services. When you see a 41% jump, that’s a clear sign of strong demand ahead.
Management Bullish on 2026 Outlook
CEO Safra Catz didn’t hold back her optimism during the earnings call. She said fiscal 2025 was a very good year, but believes 2026 will be even better with “dramatically higher” revenue growth rates.
The company is guiding for overall revenue growth of 15% to more than $67 billion in fiscal 2026. That’s well ahead of the Wall Street consensus of $65.36 billion. When a company beats expectations and then raises guidance, investors tend to take notice.
Oracle kept the good news coming toward the end of June. In a filing, the company said it was “off to a strong start in FY26” with multi-cloud revenue continuing to grow at over 100%.
Then came the real kicker. Oracle revealed it secured a cloud services agreement projected to generate over $30 billion in annual revenue beginning in 2028. The stock jumped 5% on that news alone.
The OpenAI Connection
Market reports later suggested OpenAI was the customer behind that massive deal. The speculation proved accurate when news broke that OpenAI agreed to lease around 4.5 gigawatts of data center power from Oracle. That sent the stock up another 5% on Wednesday.
🚨BREAKING: OpenAI and Oracle reached a deal to expand Stargate partnership in the US
> OpenAI just booked massive ~4.5 GW of data center capacity from Oracle
> OpenAI strategy to push beyond Azure
> $40 billion nvidia deal powers this expansion
> Oracle $30 billion annual… pic.twitter.com/ZABmjvPEhU— NIK (@ns123abc) July 2, 2025
The deal is part of the Stargate project, launched by President Trump earlier this year. The project aims to strengthen America’s position as a global AI leader by building infrastructure to support high-level AI research and development.
Oracle will build several data centers nationwide in collaboration with partners. Potential locations include Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania. The company also plans to increase power capacity at its current Abilene, Texas site.
The 4.5 gigawatts of capacity represents nearly a quarter of the total data center capacity currently operating in the U.S. That’s a massive commitment from OpenAI and shows just how much infrastructure is needed to support AI development.
The deal also highlights OpenAI’s strategy of partnering with multiple cloud providers as it scales up operations. Rather than relying on a single provider, OpenAI is diversifying its infrastructure needs across different companies.
Wall Street analysts have responded positively to Oracle’s recent developments. The stock currently has a Moderate Buy consensus rating based on 20 Buy ratings and 11 Hold ratings from analysts over the past three months.
The average price target sits at $216.65, which actually implies about 6% downside from current levels. That suggests the stock may have gotten ahead of itself in the near term, despite the strong fundamentals.
Oracle’s year-to-date performance has been impressive, with the stock up over 38% so far in 2025. The company filed that it was off to a strong start in fiscal 2026, with multi-cloud revenue continuing to grow at over 100%.
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