Oracle reports fiscal 2026 second-quarter results after Wednesday's closing bell, and all eyes are on the cloud computing deal that transformed the company's trajectory.

In September, Oracle and OpenAI announced a partnership valued at $300 billion over five years—one of the largest technology infrastructure contracts ever signed. The deal positions Oracle as a key player in the AI infrastructure buildout, but questions remain about execution and profitability.

What Wall Street Expects

Analysts are forecasting:

  • Earnings per share: $1.64 (up 11.6% year-over-year)
  • Revenue: $16.19 billion (up 15.2% year-over-year)

Cloud infrastructure growth will be the key focus. Oracle has positioned itself as a cloud alternative to AWS, Azure, and Google Cloud, targeting customers who want high-performance computing without the hyperscaler complexity.

The OpenAI Deal Explained

The September agreement commits OpenAI to purchasing $300 billion of cloud computing power from Oracle over approximately five years, with the contract taking effect in 2027.

Key details:

  • Requires approximately 4.5 gigawatts of electricity—roughly what 4 million U.S. homes consume
  • New data center campuses planned in Wyoming, Pennsylvania, Texas, Michigan, and New Mexico
  • Tied to the Stargate Project, a $500 billion AI infrastructure initiative involving Oracle, OpenAI, and SoftBank

Oracle shares jumped more than 35% following the announcement, adding roughly $150 billion in market cap on a single contract.

Questions for Management

Investors will want clarity on several points:

Revenue recognition timing: The deal starts in 2027. What does Oracle's cloud revenue trajectory look like until then?

Capital expenditure: Building data centers capable of handling OpenAI's workloads requires massive investment. How will Oracle fund construction?

Profitability: At what margins will Oracle deliver OpenAI's computing needs? Cloud infrastructure is capital-intensive with thin margins.

Customer concentration: A $300 billion deal with one customer creates significant concentration risk. What happens if OpenAI's growth slows?

OpenAI's Financial Reality

There's a elephant in the room: OpenAI's own financial sustainability.

To pay for the deal, OpenAI would need to generate at minimum $60 billion in annual revenues—six times its current estimated $10 billion run rate. The company is not yet profitable and continues to burn cash.

OpenAI's path to profitability depends on continued ChatGPT growth, enterprise adoption, and potentially new products. If that revenue growth materializes, the Oracle deal is transformative for both companies. If it doesn't, questions emerge about contract durability.

What to Watch in the Report

Cloud revenue growth rate: Anything above 25% year-over-year signals strong momentum.

Remaining performance obligations (RPO): This metric shows future contracted revenue. The OpenAI deal should significantly boost RPO figures.

Guidance: Management's outlook for fiscal 2026 and beyond will signal confidence in the growth trajectory.

Commentary on AI demand: How is Oracle benefiting from broader AI infrastructure buildout beyond OpenAI?

The Bull Case

Oracle has successfully repositioned itself from legacy database vendor to cloud infrastructure player. The OpenAI deal provides visibility into years of future revenue and validates Oracle's technology capabilities.

The Stargate Project gives Oracle exposure to AI infrastructure spending that could define the next decade of technology investment. Even if only partially realized, the deal transforms Oracle's growth profile.

The Bear Case

Execution risk is substantial. Building data centers at the required scale, on time and within budget, is enormously challenging. Any delays or cost overruns could squeeze margins.

Customer concentration creates vulnerability. If OpenAI stumbles or restructures, Oracle's anticipated revenue disappears.

Competition from AWS, Azure, and Google Cloud isn't standing still. Oracle must continue winning customers beyond OpenAI to justify its valuation premium.

The Bottom Line

Wednesday's earnings report will offer the first glimpse into Oracle's trajectory following the transformative OpenAI announcement. The numbers matter, but management commentary on deal execution and customer pipeline may matter more.

Oracle has made a huge bet on AI infrastructure. Wednesday, investors will learn how that bet is progressing.