Oracle’s Cloud Push Fuels Growth but Raises Costs

Oracle faces a critical test of investor confidence when it releases an update on its long-running transition toward cloud computing.

Oracle’s renewed growth has largely been driven by its shift to cloud services. (Photo: Oracle Cloud Facebook) 

The company will report third-quarter earnings Tuesday afternoon, a key moment that could influence its stock performance, Barron’s Daily reported.

Wall Street analysts expect adjusted earnings of $1.70 per share, up from $1.47 a year earlier, while sales are projected to grow 20% to $16.9 billion. Oracle’s renewed growth has largely been driven by its shift to cloud services.

From fiscal year 2012 to 2020, the company’s revenue grew at only about 1% annually, but growth has accelerated since it began offering cloud-based versions of its software after initially resisting the industry shift.

Last quarter, sales of cloud applications rose 11% year over year.

Another major part of Oracle’s strategy is renting servers through the cloud—a business pioneered by Amazon Web Services and now dominated by major players such as Microsoft and Alphabet, along with smaller “neocloud” companies like CoreWeave.

Oracle’s infrastructure business has been boosted by a $300 billion multiyear contract with AI leader OpenAI, helping drive 68% revenue growth last quarter.

However, the rapid cloud expansion has come with high costs.

Although operating cash flow remained strong over the past year, capital expenditures have surged. In the first six months of fiscal 2026 alone, Oracle’s debt and lease liabilities increased by $23 billion.