Oracle (ORCL) reported strong Q1 2026 financial results, showcasing momentum driven by its growing cloud business. The company reported a 12% increase in total revenue to $14.9 billion, driven by a 28% increase in cloud revenues. A key highlight was the 359% year-over-year (YoY) increase in total remaining performance obligations (RPO) to $455 billion, indicating a huge backlog of contracted future revenue and strong demand for Oracle's cloud infrastructure.
● Total revenue - $14.9B, up 12%: This strong growth shows the company as a whole is successfully expanding, with its new cloud businesses more than compensating for any slowdown in legacy products.
● Cloud revenue - $7.2B, up 28%: Growing more than twice as fast as the overall company, this metric confirms that Oracle's strategic change to the cloud is working and is now the primary engine of its growth.
● Cloud infrastructure revenue - $3.3B, up 55%: This explosive growth is the most critical indicator, proving Oracle is successfully capturing a share of the high-demand AI market and is now a serious competitor to established cloud giants like Amazon and Microsoft.
● Earnings per share (EPS) - $1.47, up 6%: This shows that Oracle's core business operations are becoming more profitable, even as the company invests heavily in building out its data centre capacity to support future growth.
● Remaining Performance Obligations (RPO) - $455B, up 359%: This huge increase in contracted future revenue is the most important forward-looking metric, providing powerful proof that the massive demand for Oracle's cloud and AI services is a long-term, committed trend, not a short-term spike.
Oracle's Q1 report shows its successful and accelerating transition to a cloud-centric business model, a shift that has been a primary driver of its stock price. The explosive 55% growth in its Cloud Infrastructure (IaaS) segment is particularly noteworthy, signalling that Oracle is now a significant player in the high-demand AI market, attracting major clients like OpenAI and Meta. This momentum is highlighted by the massive expansion of its RPO, which provides strong visibility into future revenue streams and justifies investor confidence. Looking ahead, Oracle's strong guidance, projecting an accelerated path to $144 billion in cloud revenue by 2030, has boosted positive analyst sentiment. The consensus "Buy" rating is supported by an average 12-month price target in the $310 to $330 range, with some high estimates reaching $410, as the overwhelming growth in contracted business and strategic AI partnerships is seen as a key catalyst for future stock price appreciation.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
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