Shares of Oracle jumped 3.9% to $220.03 on June 9 as traders positioned ahead of tomorrow's fiscal Q4 earnings report, buoyed by a week-old endorsement from Arm's CEO naming Oracle as a customer for the chipmaker's first in-house data center processor. The question investors must answer by Wednesday evening: Is this a company converting AI hype into durable profit, or one borrowing its way into a promise it can't yet afford?
Arm's Stamp of Approval Signals Oracle's AI Cloud Is Real
At Computex on June 2, Arm CEO René Haas confirmed Oracle, alongside ByteDance and Meta, as a customer of Arm's new in-house data center chip — the first time the chip designer has sold finished silicon directly to cloud buyers.
Arm's processors are designed to double the per-rack performance of traditional x86 chips. For Oracle shareholders, this validates that its cloud infrastructure business is competitive enough to attract cutting-edge chip partnerships — a credibility boost heading into earnings.
Wall Street Expects a Beat, but the Real Test Is the Backlog
Analysts expect Q4 revenues of $19.1 billion, up 20% year-on-year.
Cloud revenue is guided to grow 46% to 50%, with non-GAAP earnings per share expected between $1.96 and $2.00.
Oracle has beaten consensus earnings estimates in each of the past four quarters. Yet the bigger number is the $553 billion in remaining performance obligations — essentially signed contracts not yet converted to revenue — which rose 325% year-over-year in Q3. Investors will scrutinize whether that backlog grew again or plateaued.
30,000 Layoffs Bought Time, Not Safety
Oracle cut roughly 30,000 employees — about 18% of its workforce — on March 31 to free an estimated $8 to $10 billion in annual cash flow for AI data center construction.
Total borrowings stood at approximately $135 billion as of late February. The layoffs offset some of that burden, but the company is spending $50 billion in capital expenditures this fiscal year alone. Negative free cash flow persists, meaning Oracle is still effectively borrowing to build.
The Stock's Wild Ride Reflects Unresolved Doubt Oracle traded as high as $244.58 on June 2 before sliding to $211.82 by June 8 — a 13% drop in four sessions — then rebounding today. The company raised its fiscal 2027 revenue target to $90 billion , a staggering jump from this year's $67 billion guide. Citi raised its price target to $330 , but RBC holds at just $190 with a Hold rating. Tomorrow's report won't just reveal a quarter — it will reveal whether Oracle's massive bet on AI infrastructure is a generational transformation or the most expensive promissory note in tech history.