Oracle (ORCL) announced its Q3 earnings post-market on Tuesday, surpassing revenue and profit forecasts. The company also elevated its 2027 revenue outlook to $90 billion, causing its stock to rise.
Following this news, shares surged by up to 6%.
This announcement coincides with reports suggesting Oracle has canceled an AI data center expansion project with OpenAI (OPAI.PVT) and is preparing for widespread layoffs affecting thousands of employees.
The AI infrastructure firm is heavily investing in data centers, a strategy that has not fully convinced investors.
Oracle’s stock has experienced a significant decline. After reaching a peak of $345.72 in September, its shares were valued at $149 by Wednesday afternoon. This represents a 54% drop over the past six months and a 23% decrease since the beginning of the year.
Oracle’s Q3 results showed earnings per share (EPS) of $1.79 and revenue of $17.19 billion, exceeding analyst predictions of $1.70 EPS on $16.9 billion revenue. In comparison, the prior year’s same quarter recorded $1.47 EPS and $14.1 billion in revenue.
Oracle’s cloud division generated $8.9 billion, slightly surpassing the $8.8 billion forecast. Cloud infrastructure revenue reached $4.9 billion, also exceeding the $4.74 billion estimate.
Over the past year, Oracle’s capital expenditures have surged dramatically, increasing by up to 269% in the first quarter to $8.5 billion. The company anticipates full-year capital expenditures to reach $90 billion.
For further details: Ongoing corporate earnings reports
This earnings report follows Bloomberg’s revelation that Oracle and OpenAI have halted a planned expansion of their Stargate data center in Texas. This development reportedly opened discussions for Meta (META) with developer Crusoe to lease the site.
However, Oracle refuted this report in a statement published on X.
The company stated, “Recent media reports concerning the Abilene site are unfounded and inaccurate.”
They elaborated, “Firstly, Crusoe and Oracle are collaborating seamlessly to rapidly construct one of the globe’s largest AI Data centers in Abilene. Two structures are fully functional, with the remaining campus progressing as scheduled. Secondly, Oracle has finalized leasing for the extra 4.5GW needed to fulfill our obligations to OpenAI.”
This also comes after another Bloomberg report indicating Oracle’s intention to lay off “thousands” of employees. This strategy is perceived as a means for Oracle to fund its extensive data center expansion.
Oracle is not unique in its multi-billion dollar investment in global data center construction.
Amazon (AMZN), Google (GOOG, GOOGL), Meta, and Microsoft (MSFT) collectively intend to dedicate $650 billion to capital expenditures in 2026, a substantial portion of which is earmarked for data centers supporting AI applications and models.