Oracle Cloud Applications and Infrastructure Shine in 2Q26

Oracle’s cloud infrastructure and applications posted double-digit growth in its latest quarter, ending the calendar year by announcing record future orders and recognizing backlogs sooner than expected. Still, the results failed to impress investors with their sky-high expectations already baked in for many AI platform vendors including Oracle, stipulating above par performance as a prerequisite to justify their lofty valuation.

For the second quarter of its fiscal 2026, Oracle posted double-digit growth across its Fusion ERP, SCM, HCM, NetSuite and CX applications, while its Industry Cloud products for verticals such as healthcare, telecom and hospitality jumped 21%, according to Mike Sicilia, CEO of Oracle.

Sicilia said he was optimistic that its Cloud applications business would outperform its competition because of its ability to automate front to back office in addition to the help of built-in agents and industry-specific solutions, citing that its 14% deferred revenue growth for Cloud applications is higher than their 11% actual gain posted for the quarter. He also expects further synergy from the recent sales reorganization by pooling together for the first time the resources of those involved in Fusion applications and vertical solutions.

Oracle Fusion ERP Cloud applications saw an 18% rise to reach $1.1 billion, while NetSuite increased 13% to hit $1 billion.

As shown in the above exhibit, the Cloud infrastructure surpassed its Cloud applications revenues for the first time with a 68% spike to more than $4.1 billion, compared with $3.9 billion for Cloud applications. Future orders or remaining performance obligations for its products – mostly for Oracle Cloud Infrastructure – experienced a five-fold increase to approached $523 billion.

CEO Clay Magouyrk said despite the talks of overspending on its data center buildout in the current AI arms race, the vendor expects to need less than $100 billion in incremental financing to meet its long-term targets, a smaller sum than industry estimates. In the second quarter, its capex amounted to $12 billion.

On the plus side of the ledger, Magouyrk said at least $4 billion in additional OCI revenues would be recognized in its fiscal 2027 because of earlier-than-expected delivery of its services with the expedited opening of its data centers covering 211 live and planned regions worldwide. If that continues to accelerate, Oracle’s Cloud revenues could start pulling away from its closest competitor Salesforce and erasing the lead now enjoyed by Google, AWS and Microsoft.

Sicilia added that the across-the-board support of the Oracle Cloud platform by major accounts like TIM Brasil and a host of AI innovators underscores the strategic nature of such partnerships. This also comes on the heels of billions of investments by Oracle partners like Accenture, KPMG and Infosys in the forms of Oracle AI-certified engineers and add-on services designed around OCI, its Cloud databases and apps.

As explained in our follow-up report on Oracle AI World, the real value of AI lies in extending automation to not just every bit of public data on the Internet, but more importantly private data and the associated applications layer behind the firewall that facilitate future computing in cases like next-generation financial reporting or account-based sales and marketing at the touch of the button. To wit, Magouyrk said the 817% jump during the latest quarter in its multicloud database consumption is a precursor to that level of ubiquity, extensibility and usability of such private data through the vectorization of Oracle AI database for any organization that wants to start incorporating own datasets into its next AI initiative for immediate return on investment.

This represents a market opportunity many times bigger than what the current crop of Generative AI large language modelers are capable of addressing, according to Larry Ellison, chairman and CTO of Oracle.

Customer highlights from Oracle’s Q2 FY26 earnings

Source: APPS RUN THE WORLD Technographics Platform, December 2025

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