Oracle’s remarkable cloud and AI growth continued in Q1 as the smallest of the four hyperscalers almost matched Microsoft’s enormous backlog total as Oracle reported RPO of $664 billion while its rapidly accelerating cloud-infrastructure business grew 121% to $7.4 billion.
To offer some perspective on these numbers for Q1 ended Aug. 31, here’s a look at Oracle’s cloud revenue and growth plus RPO totals and growth across the past five quarters:
ORACLE CLOUD AND RPO RESULTS FOR PAST FIVE QUARTERS
| FY27 Q1 | FY26 Q4 | FY26 Q3 | FY26 Q2 | FY26 Q1 | |
| 8/31/26 | 5/31/26 | 2/28/26 | 11/30/25 | 8/31/25 | |
| Cloud Rev. | $11.6B | $9.9B | $8.9B | $8.0B | $7.2B |
| Cloud Grth. | 62% | 47% | 44% | 34% | 28% |
| RPO | $664B | $638B | $553B | $523B | $455B |
| RPO Growth | 46% | 363% | 325% | 438% | 359% |
As I see it, all the hand-wringing about Oracle’s ability to compete with the astronomical investments required for AI data centers becomes increasingly silly when we look at three vital sets of numbers:
- Cloud revenue and growth: as the table above shows, Oracle’s cloud business — infrastructure plus applications — continues to grow more rapidly even as that business gets much larger very quickly. In Q1 a year ago, the cloud-revenue growth rate was 28%, and in this Q1 it was 62%.
- RPO: Ask yourself: how is it possible for Oracle to compile a backlog total of $664 billion — almost matching Microsoft’s $678 billion — when Microsoft’s cloud business is 6X larger than Oracle’s? The only answer is that many, many customers — led by a huge commitment from OpenAI — believe that Oracle infrastructure offers the path forward into the AI future.
- Guidance: For Q2, Oracle expects its torrid cloud growth to not only continue but to accelerate: “Total Cloud revenue is expected to grow between 64% and 70% in constant currency and between 65% and 71% in USD.”
Final Thought
I’ll have more next week on Oracle’s Q1 results, but my first-impression bullishness is centered on three key dynamics:
- Its current cloud and AI business is booming;
- its backlog remains in hypergrowth and extends far beyond the massive deal with OpenAI; and
- free cash flow for the quarter was -$5 billion, reflecting the company’s careful management of its need to invest aggressively to meet that massive customer demand reflected in RPO of $664 billion while also creating innovative technological and go-to-market approaches to building out AI data centers more rapidly and productively than anyone else in the market.
