Oracle reports record cloud revenue but AI spending sparks investor worries

Oracle posted its strongest quarterly performance, reporting revenue of $19.18 billion for the fourth quarter, a 21% year‑over‑year increase. Cloud revenue rose 47% to $9.9 billion and Oracle Cloud Infrastructure, driven by artificial‑intelligence demand, surged 93% to $5.8 billion. Net income reached $4.22 billion and adjusted earnings per share were $2.11, beating analysts’ forecasts.

The company highlighted a backlog of contracts valued at $638 billion, but warned that massive AI‑related capital spending has strained cash flow. Free cash flow was a negative $23.7 billion, and annual capex jumped 162% to $55.66 billion. Oracle plans to raise up to $40 billion through debt and equity issuances to fund its AI infrastructure expansion and reaffirmed its target of $90 billion in revenue for fiscal 2027. After the results, the shares fell about 6% in after‑hours trading.