Oracle projects Q1 revenue growth of 28% to $19.13 billion driven by cloud infrastructure demand.

Oracle Corporation (NYSE: ORCL) is scheduled to report its first fiscal quarter earnings on September 10. Analysts project year-on-year revenue growth of 28%, reaching $19.13 billion, driven by sustained demand for artificial intelligence infrastructure services. Earnings per share are estimated at $1.74, up from $1.47 in the prior-year period. For the second quarter, guidance anticipates revenue growth of 31% to $21.17 billion. This follows a fourth fiscal quarter where revenue rose 21% to $19.2 billion, while remaining performance obligations (RPO) surged by $85 billion to $638 billion.

Oracle’s aggressive capital raising strategy contrasts sharply with its operational growth metrics. Last year, the company raised $43 billion in debt and $5 billion in equity, with plans to secure an additional $40 billion to fund AI infrastructure expansion. This heavy leverage supports rapid scaling but has pressured the stock price, which declined from $341 in September 2025 to a low of $114 in July. Despite leading competitors including Amazon.com Inc., Microsoft Corporation, and Alphabet Inc. in securing Japan’s secret air-gapped cloud project—a critical initiative for secure intelligence sharing between Tokyo and its allies—investors remain cautious about the sustainability of AI-driven growth amid broader warnings of potential market bubble risks.

Quarterly capital expenditure climbed to $16.49 billion, contributing to a 162% increase in full-year capital expenditures, which reached $55.7 billion. These infrastructure investments pushed Oracle’s free cash flow to a negative $23.7 billion. This occurred alongside a 47% surge in cloud revenue and a contracted backlog of $638 billion. Under new CFO Hilary Maxson, the market continues to evaluate these spending trends. BNP Paribas analyst Stefan Slowinski highlighted that fiscal 2027 capital spending remains a primary focal point, noting that expenditures could range between $80 billion and $100 billion as the company accelerates development of the non-Abilene Stargate campuses. BNP Paribas previously raised its fiscal 2027 capex estimate to $83 billion from $72 billion, significantly above the consensus estimate of approximately $60 billion.

Following its significant decline, Oracle’s stock has shown signs of stabilization. Shares have rebounded above the key resistance level of $133.95, previously tested in February, March, and April. Technical indicators suggest potential upward momentum: the Relative Strength Index (RSI) has reached 60, MACD lines have crossed the zero line, and a put/call ratio of 0.48 indicates higher call option volume than puts. Analysts point to $177 as a potential price target, aligning with high call option concentration. The forward P/E ratio stands at 19.6, lower than peers in the large-cap technology sector.

However, the longer-term chart remains decisively bearish. Oracle trades 15.2% below its 20-day simple moving average (SMA), 29.9% below its 50-day SMA, and 34.5% below its 200-day SMA. The 20-day SMA sitting below the 50-day SMA reinforces the downtrend, while a death cross formed in January maintains bigger-picture trend pressure. Near-term momentum remains the key story, with the RSI at 27.42—an oversold reading that often signals stretched selling conditions.

Investors and analysts are closely monitoring several critical factors: How will Oracle’s aggressive $40 billion debt issuance impact its credit rating and cost of capital as it scales AI infrastructure? Can the company sustain the projected 31% revenue growth in Q2 without facing margin compression from heavy capital expenditures? What specific operational metrics will investors scrutinize to validate the sustainability of AI demand against potential bubble risks? Additionally, how will projected fiscal 2027 capital expenditures of up to $100 billion impact Oracle’s ability to generate positive free cash flow in the coming years? What timeline does the company anticipate for the development of non-Abilene Stargate campuses to begin monetizing these massive infrastructure investments? Will the negative free cash flow and high capex force Oracle to adjust its dividend policy or share buyback programs to preserve liquidity?