AI cloud demand is the core driver of this rally

Oracle’s Q1 earnings report prompted a “5%+ after-hours gain” from the market, which was essentially not simply a reward for exceeding expectations, but a repricing of its AI cloud business. Q1 revenue was $19.345 billion, up 30% year over year, while adjusted EPS reached $1.92, well above the market expectation of $1.74. More importantly, cloud infrastructure revenue surged 121% year over year to $7.4 billion, while total cloud revenue grew 62% to $11.6 billion.

What truly excited investors was the AI order flow. Oracle added more than $3 billion in AI cloud contracts in a single quarter, and remaining performance obligations reached $664 billion, an increase of $209 billion year over year. This figure means the “reservoir” of future revenue has become extremely large.

Of course, the market is not without concerns. The pace of spending on AI infrastructure is equally astonishing, capital expenditures remain elevated, and free cash flow is still under pressure. However, capital markets often focus on growth first and profits later. If Oracle can continue converting AI orders into revenue, this rally may only be the starting point of a revaluation, rather than the end.#甲骨文Q1业绩超预期盘后涨超5%