In the high-stakes world of enterprise software, few events rattle Wall Street quite like an earnings report that defies expectations. Oracle Corp.’s latest quarterly results, released on September 9, 2025, did just that, sending shares surging 27% in after-hours trading despite missing earnings estimates. The catalyst? A staggering projection of future revenue tied to artificial intelligence demand, which left analysts scrambling to revise their models upward.

The company’s total remaining performance obligations—a key metric signaling booked but unfulfilled contracts—soared 359% year-over-year to $455 billion. This figure, highlighted in Oracle’s earnings call, underscores a pipeline swollen with AI-related cloud deals, positioning the company as a dark horse in the race for AI infrastructure dominance. Safra Catz, Oracle’s CEO, emphasized during the call that this backlog reflects “unprecedented demand” for the company’s cloud services, particularly in training large language models.

Analysts Reel from the Unexpected Surge in AI-Driven Backlog

Reactions poured in swiftly, with analysts expressing outright astonishment. As reported by CNBC, one prominent voice captured the sentiment: “We’re all kind of in shock.” This wasn’t hyperbole; firms like Morgan Stanley quickly hiked their price targets, citing Oracle’s AI momentum and recent contract wins. The bank’s analysts projected a revenue compound annual growth rate exceeding 20% through fiscal 2029, buoyed by partnerships with hyperscalers like Amazon Web Services and Google Cloud.

Even as earnings per share came in at $1.35, slightly below the $1.38 consensus, the market focused on the forward-looking indicators. Oracle’s cloud infrastructure revenue grew 52% year-over-year, outpacing rivals, according to data from the company’s report. Posts on X, formerly Twitter, echoed this buzz, with users like App Economy Insights noting the “record level AI demand” driving these gains, drawing from Oracle’s own fiscal commentary.

Strategic Partnerships Fuel Oracle’s Cloud Resurgence

Delving deeper, Oracle’s multi-cloud strategy has been pivotal. A recent agreement with AWS allows customers to run Oracle databases seamlessly across platforms, a move Catz described as the “biggest news” of the quarter. This interoperability addresses long-standing criticisms of Oracle’s siloed approach, potentially unlocking billions in cross-cloud revenue. Analysts at Mizuho, who raised their price target to $300, praised this in a note covered by Benzinga, highlighting how it positions Oracle against entrenched players like Microsoft Azure.

Competition remains fierce, however. While Oracle’s RPO explosion signals robust AI adoption, execution risks loom—supply chain constraints for data centers and intensifying rivalry from Amazon and Google could temper growth. Yet, as WebProNews detailed in a recent analysis, Oracle’s focus on sovereign AI clouds and healthcare-specific solutions differentiates it, with projections suggesting cloud revenue could hit $6.7 billion quarterly by year’s end.

Market Implications and Investor Sentiment Shift

Broader market sentiment has shifted dramatically. TipRanks data shows 34 analysts now rating Oracle as a buy, with an average price target implying over 20% upside from pre-earnings levels. This optimism contrasts with earlier skepticism about Oracle’s pivot from legacy databases to AI-centric cloud services. Yahoo Finance’s analyst estimates, updated post-earnings, forecast accelerating revenue growth into 2026, driven by deals like those with OpenAI for AI model training.

Investors are betting big on this trajectory. The stock’s 27% pop, as chronicled by CNBC, erased months of underperformance, pushing Oracle’s market cap toward $500 billion. Larry Ellison, the company’s co-founder and chairman, reiterated in the earnings transcript—transcribed by Investing.com—that multi-cloud revenue from partners grew 115% quarter-over-quarter, a testament to strategic agility.

Looking Ahead: Risks and Opportunities in Oracle’s AI Bet

Still, insiders caution against unbridled enthusiasm. While the RPO jump is impressive, converting it to recognized revenue depends on timely deployments amid global chip shortages. CNN’s market coverage noted potential margin pressures from aggressive data center expansions, with Oracle planning billions in capital expenditures. Analysts like those at Morgan Stanley flagged these in their revised outlook, embedding conservative assumptions for fiscal 2026.

Nevertheless, Oracle’s story is one of reinvention. From its roots in relational databases, the company has morphed into an AI powerhouse, leveraging partnerships and proprietary tech like its Gen2 Cloud. As fiscal 2026 unfolds, with an analyst day slated for September 12, expect more revelations. For now, the shockwaves from these projections have redefined Oracle’s place in the tech pantheon, proving that in the AI era, backlog can be as valuable as current earnings.