Oracle Beats Q4 Estimates; Stock Slips on Cloud Costs

Oracle reported fiscal fourth-quarter results that beat analyst expectations. The stock fell 9% in early trading.

The company earned an adjusted $2.11 per share on $19.18 billion in revenue, above the $1.97 and $19.09 billion consensus. Oracle pointed to a $638 billion remaining performance obligation backlog – driven largely by AI contracts – and guided fiscal 2027 revenue to $90 billion.

The market’s reaction focused on the cost of getting there. Oracle plans to raise $40 billion through debt and equity to fund AI data center expansion. That financing plan, combined with a decline in software license and support revenue, overshadowed the strong quarter and guidance. Traders said the capital raise diluted the impact of the backlog growth.

Oracle’s Alpha Score 55 sits at a moderate reading that reflects the tension between strong demand signals and the capital intensity of the AI infrastructure buildout. For a cloud company, the backlog is a forward revenue indicator. The financing cost will weigh on free cash flow in the near term.

Microsoft’s Xbox division is undergoing a major reorganization ahead of the company’s fiscal year-end on June 30. New CEO Asha Sharma said the division is “not in a healthy spot” with an “accountability margin” of 3%, and plans to cut jobs and slash marketing budgets. The business’s struggles stem from price increases, canceled games, studio closures, and releasing titles on competitors’ consoles over the past several years. The margin figure is a sharp contrast to Microsoft’s overall profitability, which runs above 40%.

Alphabet’s Wing and Walmart are expanding their drone delivery partnership to seven new metro areas – Memphis, New Orleans, Philadelphia, Phoenix, San Diego, San Francisco, and Salt Lake City. The network will cover nearly 20 markets, part of a broader plan to reach 270 locations. The expansion signals a push toward operational scale for drone delivery, though unit economics and regulatory hurdles remain.

Stock index futures were higher in early trading as the U.S. said it had completed strikes against Iran. Crude oil fell 0.5% to $89. Bitcoin rose 2% to $62,000. Gold edged up 0.3% to $4,085.

Oracle’s next quarterly report in September will show whether the capital raise is translating into revenue acceleration from the backlog. The market is pricing in the cost of the AI push before the payoff.