ORACLE ' S 2026 FINANCIAL ANALYSIS: THE A.I.C., STRATEGIC TRANSFORMATION OF A DATABASE COMPANY
By 137 Labs
On 10 March 2026, Oracle published the third quarter of the financial year 2026. Following the publication of the financial statements, the company ' s stock price rose by nearly 10 per cent after and in the next day ' s transactions, making it one of the most prominent in the recent technological industry。
ON THE FACE OF IT, IT WAS ONLY A QUARTERLY PERFORMANCE THAT EXCEEDED MARKET EXPECTATIONS. HOWEVER, IF ONE LOOKS AT LONGER-TERM INDUSTRIAL LOGIC, THE FINANCIAL STATEMENT REVEALS NOT JUST GROWTH IN PERFORMANCE, BUT AN ONGOING CORPORATE STRATEGIC SHIFT: A COMPANY KNOWN FOR DECADES AS DATABASE SOFTWARE IS TRYING TO REDEFINE ITS ROLE IN THE AI ERA, MOVING FROM TRADITIONAL ENTERPRISE SOFTWARE MANUFACTURERS TO AI COMPUTING INFRASTRUCTURE PROVIDERS。
This financial statement needs to be understood at three levels: financial data, industry trends and enterprise strategies。
OVERVIEW OF THE FINANCIAL STATEMENTS: AI DEMAND DRIVES PERFORMANCE OVER EXPECTATIONS
According to publicly disclosed data, Oracle achieved revenues of approximately $17.2 billion in the third quarter of fiscal year 2026, an increase of about 22 per cent over the same period, significantly exceeding market expectations. The adjusted gain per share was $1.79, an increase of approximately 21 per cent over the same period。
In terms of income structure, cloud operations have become the most important engine of growth for companies. The revenue from Oracle cloud services amounted to approximately $8.9 billion, an increase of 44 per cent over the same period and more than half of the company ' s total revenue。
The most significant increase was in the Oracle Cloud Industries (OCI) operation. OCI ' s revenue grew by 84 per cent over the same period, to about $4.9 billion, making it the fastest growing block of companies。
At the same time, there has been an explosion in the company ' s future order reserve. The residual performance obligation (RPO) disclosed by Oracle amounts to $553.0 billion, an increase of 325 per cent over the same period, which means that the company has locked in significant long-term contract revenues in the coming years。
Management has also raised long-term growth expectations in its financial statements, with corporate revenues expected to reach approximately $90 billion in fiscal year 2027。
These data imply not only strong performance in the short term, but also a high degree of certainty in business growth in the coming years。
II. Cloud operations as a new engine of growth
Looking back at Oracle ' s business structure over the past decade, it can be seen that the company has experienced a significant change in its income structure。
The core business of Oracle has long been database software and enterprise applications. Banks, telecommunications, Governments and large enterprises have a large number of data systems operating on Oracle, making companies one of the most stable manufacturers in the global business software field。
However, with the rise of cloud computing, the traditional software authorization model is gradually being replaced by subscription cloud services. Oracle also began building its own cloud platform in the mid-2010, Oracle Cloud Industries。
In the early years, the Oracle cloud operation was relatively slow, as markets were already occupied by Amazon AWS, Microsoft Azure and Google Cloud。
In recent years, however, the situation has begun to change. As enterprises gradually migrate their databases to clouds, Oracle begins to use its customer base in the database market to drive cloud business growth. If an enterprise already uses the Oracle database, migration to the Oracle cloud is often easier。
AT THE SAME TIME, THE OUTBREAK OF THE AI INDUSTRY HAS ALTERED THE CLOUD COMPUTING DEMAND STRUCTURE. THE CLOUD PLATFORM IS NO LONGER SIMPLY A SOFTWARE INFRASTRUCTURE FOR RUNNING A WEBSITE OR ENTERPRISE APPLICATIONS, BUT IS BECOMING AN AI COMPUTING PLATFORM FOR PROVIDING GPU ALGORITHMS, DATA CENTRES AND HIGH-PERFORMANCE NETWORKS。
It was in this trend that Oracle found new opportunities for growth。
III. CHANGES IN CLOUD COMPUTING PATTERNS BY THE OUTBREAK OF AI COMPUTING NEEDS
RAPID DEVELOPMENTS IN THE AI INDUSTRY HAVE CREATED UNPRECEDENTED DEMANDS FOR COMPUTING RESOURCES。
LARGE LANGUAGE MODELS, AUTO-DRIVING MODELS AND A VARIETY OF GENERATING AI APPLICATIONS ALL REQUIRE ENORMOUS COMPUTING TO COMPLETE TRAINING AND REASONING. TRAINING A LARGE MODEL USUALLY REQUIRES THOUSANDS OR EVEN TENS OF THOUSANDS OF GPUS TO CALCULATE TOGETHER, AND THESE RESOURCES ARE OFTEN PROVIDED BY CLOUD DATA CENTRES。
AS A RESULT, THE CLOUD COMPUTING INDUSTRY IS UNDERGOING A STRUCTURAL CHANGE: THE CLOUD PLATFORM IS NOT ONLY A SOFTWARE OPERATING ENVIRONMENT, BUT ALSO AN AI COMPUTING INFRASTRUCTURE。
Oracle's OCI operations have been growing rapidly in this area. The OCI provides not only traditional cloud services, but also GPU computing clusters, high-performance networks and AI training platforms, making them an important infrastructure for the AI training model。
Some AI firms chose Oracle because of the high availability of GPU resources, network performance and the relative competitiveness of costs. This has enabled Oracle to gradually establish its position in the AI computing market。
THE FIGURES IN THE FINANCIAL STATEMENTS ALSO REFLECT THIS TREND. THE 84 PER CENT GROWTH RATE OF OCI OPERATIONS IS MUCH HIGHER THAN THAT OF TRADITIONAL SOFTWARE OPERATIONS AND IS MUCH HIGHER THAN THE AVERAGE GLOBAL CLOUD MARKET GROWTH。
IV. THE TRANSFORMATION OF DATABASE COMPANIES TO AI INFRASTRUCTURE
Over the longer term, Oracle is undergoing a change in business positioning。
Over the past few decades, the most important product of Oracle has been the database. Enterprise data storage, trading systems and ERP systems rely heavily on Oracle database technology。
BUT IN THE AI ERA, DATA AND ALGORITHMS ARE DEEPLY INTEGRATED. BUSINESSES NEED NOT ONLY TO STORE DATA BUT ALSO TO USE THEM TO TRAIN MODELS AND BUILD SMART APPLICATIONS。
Oracle tried to build a new technology system using its advantages: a combination of databases, cloud infrastructure and AI。
The logic of this strategy is very clear. Enterprise data are already stored in the Oracle database and, if they are directly trained and analysed on the Oracle cloud, the enterprise can complete data management, modelling and application deployment on the same platform。
In terms of technical pathways, this is in fact a transformation from “ database software company ” to “ data and AI infrastructure platform &rdquo。
V. Strategic stakes behind large investments
However, this transformation is not without cost。
To meet the needs of AI, Oracle is in the process of building a data centre on a large scale and procuring GPU equipment. The company expects capital expenditure to reach approximately $50 billion in fiscal year 2026 for the expansion of the AI data centre and computing infrastructure。
The scale of these investments is unprecedented in Oracle ' s history. To raise funds, companies also plan to raise some $45 billion to $50 billion through bond and equity financing。
THE RISKS ASSOCIATED WITH LARGE INVESTMENTS ALSO RAISE MARKET CONCERNS. SOME INVESTORS ARE CONCERNED THAT THESE DATA CENTRES MAY NOT BE ABLE TO PRODUCE SUFFICIENT RETURNS QUICKLY IF DEMAND FOR AI INCREASES BELOW EXPECTATIONS。
Indeed, prior to the issuance of the financial statements, Oracle stock prices had fallen significantly because of the size of the investment, reflecting the market ' s concern about its capital expenditure plan。
Thus, Oracle's current strategy is more like a &ldquao; high-input, high-return &rdquao; long-term bet。
VI. Changes in the pattern of competition in cloud computing
Oracle remains a chaser in the global cloud computing market。
The cloud market has long been dominated by three major powers: the Amazon AWS, Microsoft Azure and Google Cloud. These three companies account for over 60 per cent of the global cloud infrastructure market。
Oracle entered the cloud market later, so the overall market share remained small。
HOWEVER, AI COMPUTING NEEDS MAY BRING ABOUT NEW CHANGES IN INDUSTRY PATTERNS. TRADITIONAL CLOUD SERVICES EMPHASIZE SOFTWARE ECOLOGY AND DEVELOPERS ' TOOLS, WHILE AI COMPUTING RELIES MORE ON GPU RESOURCES, DATA CENTRE SIZE AND HIGH PERFORMANCE NETWORKS。
New players still have access to market space in this area。
Oracle is precisely trying to expand its cloud infrastructure operations during this window。
VII. The way forward: whether Oracle can become an AI comptoir
The transformation of Oracle has begun to bear fruit, as seen in the financial statements of 2026. The rapid growth of cloud operations and the record high level of order reserves have made AI demand an important driver of corporate performance growth。
However, this strategy is still at an early stage。
Over the next few years, Oracle will need to prove three things: first, that there can be a sustained increase in al-calculatory demand; secondly, that companies can gain a stable customer base in the cloud market; and thirdly, that large capital investments can eventually be translated into long-term profitability。
If these conditions are met, Oracle may move from a traditional enterprise software manufacturer to an important participant in the global AI infrastructure。
In the age of artificial intelligence, data, computing and cloud platforms are becoming new technological infrastructures. Oracle is trying to use this trend to reshape its business model。
The financial report for 2026 may be the beginning of this transformational story。
