Oracle Corporation (ORCL) is set to report its fiscal third-quarter 2026 earnings on March 10 after the market close, with investors and analysts closely scrutinizing the company's performance amidst significant capital expenditures for artificial intelligence (AI) infrastructure and its accelerating cloud business.
Wall Street anticipates adjusted earnings per share (EPS) of $1.71, representing a 16.3% year-over-year increase. Revenue is forecast to reach approximately $16.92 billion, which would signify roughly 20% growth. This report is particularly notable as Oracle is the first major data and analytics software company to report this season, leaving no comparable peer data for context.
The performance of Oracle Cloud Infrastructure (OCI) is a central focus. OCI revenue growth has accelerated consecutively: 49% in Q3 FY25, 52% in Q4, 55% in Q1 FY26, and 68% in Q2 FY26. Management has set a target of around 77% growth for the full fiscal year, aiming for about $18 billion in OCI revenue. The long-term ambition is even more staggering, with Oracle targeting $144 billion in total cloud revenue by fiscal 2030.
A key metric demonstrating future demand is Remaining Performance Obligations (RPO), which represents contracted future revenue. In Q2 FY26, Oracle's RPO surged to $523 billion, a 438% year-over-year increase. The Q3 RPO figure will be closely watched for any signs of a slowdown.
However, this aggressive growth strategy comes at a high cost. Oracle expects to spend about $50 billion in capital expenditures in fiscal 2026. Future operating lease commitments have also ballooned to approximately $248 billion as of November, surpassing cloud rivals like Microsoft and Amazon. This spending has turned Oracle's trailing free cash flow negative, despite operating cash flow remaining above $22 billion.
This financial commitment has weighed on the stock, with ORCL shares down more than 20% year-to-date and roughly 50% below its September 2024 peak. Analyst sentiment reflects this tension. Deutsche Bank analyst Brad Zelnick cut his price target from $375 to $300 on Monday, citing concerns around cash burn related to the AI buildout, though he maintained a Buy rating. He pointed to positive signals like Oracle's successful unsecured investment-grade bond offering in February and OpenAI's $110 billion private funding round.
Barclays also lowered its price target to $230 from $310, warning that accelerating AI-driven revenue growth could create short-term margin pressure due to upfront costs and timing of capacity ramps. Analyst Raimo Lenschow noted that while Q3 should show "meaningful AI-driven revenue acceleration," gross margins and EPS could face headwinds.
Scotiabank maintained a positive outlook, lowering its price target slightly to $215 from $220 while keeping a Sector Outperform rating. The firm believes increased capital expenditures should directly translate into monetization opportunities and support OCI targets, and that recent capital raising efforts should ease funding concerns.
Oracle also addressed recent reports regarding its flagship AI data center project in Abilene, Texas. Following a Bloomberg report suggesting Oracle and OpenAI had abandoned plans to expand the facility, Oracle firmly rejected the claims, stating construction remains on track. The company affirmed that two buildings are operational and the rest of the campus is progressing, with partner Crusoe echoing the collaborative effort to deliver one of the world's largest AI data centers.
