Oracle set to report earnings with Wall Street expecting 30% AI-fueled growth in cloud business

Tue, Sep 9, 2025, 10:48 AM 3 min read

Oracle (ORCL) is set to report its fiscal first-quarter earnings Tuesday after the bell, with Wall Street expecting a 30% jump in cloud business revenue fueled by AI. Investors will also be watching closely for details on the company's $30 billion deal, reportedly with OpenAI.

Shares in the software giant have soared more than 60% over the past year. The stock was down less than 1% ahead of the earnings report.

The company has been securing a massive amount of Nvidia’s coveted GPUs (graphics processing units, or AI chips) and renting out that computing power through its OCI cloud business.

Analysts expect Cloud Services, the company’s largest revenue driver, to increase to $7.3 billion in Q1.

For the quarter ended in August, analysts polled by Bloomberg expect the company to report adjusted earnings per share of $1.48 and revenue of $15 billion. That’s ahead of the $1.39 earnings per share and $13.3 billion in quarterly revenue in the previous year.

But Barclays (BARC.L) analyst Raimo Lenschow wrote in a note to clients Monday: “We argue that this Q1, investor[s] should pay more attention to the additional commentary from management rather than the quarter itself.” He pointed to Oracle’s announcement in June of a deal set to bring in over $30 billion in annual revenue starting in its 2028 fiscal year, sending the stock to a new record, with multiple media outlets reporting the customer is OpenAI.

Other analysts also stressed the importance of the deal, with RBC Capital Markets analyst Rishi Jaluria writing: “[T]he stock reaction will hinge on clarity around incremental contribution from the presumed OpenAI deal, Stargate timing, and OCI growth and profitability.”

Investors will also be listening for details about the Stargate AI project — a massive $500 billion AI infrastructure deal between Oracle, OpenAI, and SoftBank (SFTBY) unveiled at the White House in June by Trump, Oracle chairman Larry Ellison, OpenAI chief Sam Altman, and SoftBank CEO Masayoshi Son.

It’s unclear how much of the $30 billion deal with OpenAI is represented by Stargate, or when the project will come online fully. OpenAI in July said its partnership with Oracle to launch an Abilene, Texas data center that would run “over 2 million chips” as part of Stargate was “progressing,” with some of the facility already “up and running.” But SoftBank in August said it’s taking longer than expected to get Stargate off the ground.

Questions remain, however, over whether Oracle can continue to ride the AI wave profitably.

“While Oracle's substantial momentum within its emerging AI infrastructure business is clear, the underlying margin profile of this incremental revenue remains a key debate,” wrote Morgan Stanley (MS) analyst Keith Weiss, noting that the company last quarter refrained from reiterating its prior 45% margin target for its 2026 fiscal year.