The old database king is having its moment, and it’s all thanks to AI’s insatiable appetite for computing power

Oracle just dropped a bombshell that sent its stock soaring 7% in after-hours trading, and frankly, it’s about time Wall Street woke up to what’s been brewing in Redwood City. The company that many had written off as a legacy database dinosaur just projected cloud infrastructure sales will jump more than 70% this fiscal year (a staggering figure that makes even Amazon’s AWS growth look pedestrian).

AI Feeding Frenzy

Here’s what’s really happening: Oracle has stumbled into the perfect storm of AI demand and supply constraints. While tech giants like Amazon and Microsoft are stretched thin trying to meet the exploding demand for AI computing power, Oracle has quietly positioned itself as the scrappy alternative that actually has the capacity to spare.

CEO Safra Catz didn’t mince words about their trajectory: “We believe FY26 will be even better as our revenue growth rates will be dramatically higher.” This isn’t typical corporate speak (Oracle is genuinely confident they’re sitting on a goldmine).

The numbers back up the swagger. Oracle’s remaining performance obligations hit $138 billion, up from $130 billion the previous quarter. That’s $8 billion in new bookings in just three months, a pace that would make any cloud provider jealous.

Stargate Advantage

Oracle’s masterstroke has been its joint venture with OpenAI called Stargate, designed to provide massive computing infrastructure for AI workloads. It’s a brilliant play (instead of competing directly with OpenAI on AI software, Oracle is betting on being the infrastructure backbone that powers the AI revolution).

Chairman Larry Ellison revealed just how crazy the demand has become: “We recently got an order that said we’ll take all the capacity you have, wherever it is. This could be in Europe, it could be in Asia, we’ll just take everything. I mean, we never got an order like that before.”

Think about that for a moment. A customer said, “Give us everything you’ve got anywhere in the world.” That’s not normal enterprise software demand (that’s a desperation-level need for AI computing power).

The Money Machine

Oracle is spending big to capitalize on this moment. Capital expenditures more than tripled to $21.2 billion last year and will hit $25 billion this year. That’s real money going into real data centers, not just cloud marketing budgets.

The company’s fiscal fourth quarter results were solid across the board:

  • Revenue: $15.9 billion (beating estimates of $15.6 billion)
  • Cloud sales: $6.7 billion, up 27%
  • Cloud infrastructure specifically: $3 billion, up 52%
  • Earnings per share: $1.70 (vs. $1.64 expected)

But here’s the kicker (Oracle expects total cloud growth to accelerate from 24% in fiscal 2025 to over 40% in fiscal 2026). That’s not a gradual improvement; that’s exponential acceleration.

Why This Matters Now

Oracle’s resurgence isn’t just about good timing (it’s about strategic positioning). While everyone was focused on the flashy AI software companies, Oracle quietly built the infrastructure pipes that all these AI dreams depend on. They’ve landed customers like Elon Musk’s xAI, Meta, and even TikTok (though that relationship remains complicated given ongoing regulatory issues and recent security breach concerns involving Oracle Cloud).

The company has also been smart about embedding AI capabilities into its existing cloud applications at no extra cost, removing barriers for customers who want to experiment with AI without breaking their budgets.

Skeptic’s View

Let’s be honest (Oracle has a history of overpromising and under delivering). The company has reinvented itself multiple times over the decades, not always successfully. The question isn’t whether AI demand is real (it obviously is), but whether Oracle can execute at the scale and speed required.

Building data centers fast enough to meet this demand is no joke. As Ellison admitted, “The reason demand continues to outstrip supply is we can only build these data centers, build these computers, so fast.” Oracle is essentially in a race against time to build capacity before competitors can catch up or demand cools.

Bottom Line

Oracle’s transformation from database legacy player to AI infrastructure kingmaker is one of the most underrated tech stories of 2025. The company has found its niche in the AI gold rush (not as the prospector, but as the one selling shovels and pickaxes to everyone else).

With revenue expected to hit at least $67 billion in fiscal 2026 (16.7% growth), Oracle isn’t just participating in the AI boom, it’s becoming essential infrastructure for it. That’s a much better position than being another me-too AI software company in an increasingly crowded field.

The real test will be execution. Can Oracle build fast enough to meet demand? Can they maintain their infrastructure advantage as AWS and Azure pour resources into catching up? Most importantly, can they avoid the classic Oracle mistake of getting too greedy with pricing just when momentum is building?

For now, the momentum is clearly with Oracle. In a market obsessed with AI software, Oracle has quietly cornered the AI hardware rental business. Sometimes, the best seat at the casino isn’t at the poker table (it’s owning the house).