March 10 (Reuters) - Oracle beat Wall Street estimates for third-quarter revenue on Tuesday, as robust demand for its cloud computing services, driven by the artificial intelligence boom, and sending its shares up nearly 7% in extended trading.
The results help to allay investor concerns that Oracle's costly multi-billion dollar push into AI computing would not generate profits quickly enough.
Remaining performance obligations (RPO), a key indicator of future contracted revenue, grew 325% from last
year to $553 billion, ahead of the $540.37 billion estimate from four Visible Alpha analysts.
Most of the increase in RPO in the quarter is related to large scale AI contracts where Oracle "does not expect to have to raise any incremental funds," the company said in a statement.
Long known for its database software and enterprise applications for finance, Oracle in recent years has repositioned itself as a cloud computing infrastructure competitor after recruiting key executives from rivals.
The company's strategy to build out data centers is helping it capture a slice of the booming AI market. Oracle has been aggressively spending to expand its cloud infrastructure to support generative AI workloads, competing for customers against hyperscalers such as Amazon's AWS and Microsoft's Azure.
Oracle also said that it has been restructuring its product development teams, as new AI code generation technology enables it to build more software in less time with fewer people.
The company raised its revenue forecast for fiscal 2027 to $90 billion, above analyst estimates of $86.6 billion, according to LSEG data.
The company reported total revenue of $17.19 billion for the quarter, compared with analysts' average estimate of $16.91 billion, according to data compiled by LSEG.
(Reporting by Juby Babu in Mexico City; Editing by Alan Barona)
