Oracle Expected to Post Higher 1Q Revenue, Despite Continued Concerns over AI Spend

Dow Jones
16 hours ago
 
 

Oracle is scheduled to report its fiscal first-quarter results after the market closes on Thursday. Here is what you need to know.

 

PROFIT: The software and cloud-computing company is expected to post a profit of $4.06 billion, up from $2.93 billion in last year's comparable quarter, according to the consensus of 13 analysts polled by FactSet.

ADJUSTED EARNINGS: Stripping out one-time items, quarterly earnings are projected to come in at $1.74 a share, up from $1.47 a share last year.

REVENUE: The Austin, Texas, company is expected to notch revenue of $19.14 billion, up from $14.93 billion a year earlier.

The stock has lost about 22% of its value over the past three months and was recently trading hands at $160.96.

 

WHAT TO WATCH

 

--Oracle in June reported higher fiscal fourth-quarter profit and revenue, fueled by continued demand across its cloud business. However, solid quarterly results weren't enough to assuage investors' concerns over surging artificial-intelligence spend. Oracle reported $55.66 billion in capital expenditures in its fiscal 2026 and guided for around $70 billion in capital expenditures in the coming year. Investors, who have started to question the sustainability of AI-spending commitments from tech companies, will be closely monitoring Oracle's capital expenditures this quarter.

--Oppenheimer analysts are expecting positive fiscal first-quarter results. "The broader enterprise software group delivered a strong quarter this season on healthy demand, which is a constructive read-through for Oracle's cloud business," the analysts said, noting the trend could support a raise to the company's full-year outlook. However, financing remains a meaningful overhang that isn't likely to go away anytime soon. "In our view, upward revisions to capex guidance and/or delays in adding capacity will weigh on sentiment and pressure multiples," the analyst said.

--Oracle inked a deal with quantum-computing company Quantinuum last month. The multi-year partnership would see Quantinuum deploy its most advanced quantum computer, Helios, in one of Oracle's AI data centers. With the agreement, the two companies will also collaborate to explore how hybrid quantum-AI infrastructure can address challenges that enterprises face. Investors will be looking for any updates on the partnership.

 
 

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