Oracle (NYSE: ORCL) is giving investors plenty of reasons to be far more bullish.

All after the software giant reported strong first-quarter results, helped by growing demand for its cloud services and a major expansion of its data center business. Revenue jumped 30% from a year earlier to $19.35 billion. That was ahead of the $19.14 billion analysts had expected. Oracle also reported net income of $4.7 billion, up 60% from $2.93 billion a year earlier.

But the biggest growth is coming from the cloud.

Cloud revenue takes off

Oracle’s cloud revenue jumped 62% from a year earlier to $11.6 billion. The company’s cloud infrastructure business was the standout performer. Revenue from cloud infrastructure more than doubled, rising 121%. Cloud applications, meanwhile, grew 10%.

The numbers show how much Oracle’s business has changed. The company has long been known for its database software, but it is now putting a substantial focus on cloud computing and the infrastructure needed to support artificial intelligence.

That shift is paying off as companies spend more money on AI.

A big bet on AI

Oracle is investing heavily to take advantage of that demand. During the quarter, the company added another 850 megawatts of data center capacity. It also signed more than $30 billion in new AI cloud contracts. Oracle said it delivered more than 300,000 GPUs to its AI cloud customers during the quarter. For Oracle, that demand represents a major opportunity.

The company is building data centers and buying the equipment needed to provide customers with the computing power they need.

Oracle expects the strong growth to continue

The company is forecasting second-quarter revenue growth of between 30% and 34%. It expects cloud revenue to rise between 64% and 70%. Oracle has also set an big target for the longer term. It expects total revenue for fiscal 2027 to reach at least $90 billion.

That would be a significant increase for a company that has spent years moving beyond its traditional software business.

Wall Street likes what it sees

Analysts also came away from the quarter feeling positive. Citi analysts reiterated their Buy rating on Oracle in a Friday note, calling the first quarter “solid.” They said the company had met expectations in almost every important area and had strengthened its position heading into its upcoming Investor Day.

More importantly, Citi believes Oracle may be setting conservative targets. The analysts described the company’s fiscal 2027 outlook as “modest” and said management’s overall guidance was conservative.

That could leave room for Oracle to raise its forecasts later.

Citi said the strength of Oracle’s first-quarter results could create a favorable setup for higher expectations at Investor Day and the company’s AI World event.

The big question for investors

Oracle’s latest results show that its strategy is gaining momentum. Cloud revenue is growing quickly. AI customers are signing huge contracts. And the company is expanding its data center capacity at a rapid pace. But investors still have to consider the other side of the story.

Oracle is spending heavily and carrying more than $100 billion in debt to fund its expansion. The company needs the demand for AI computing to remain strong enough to make those investments worthwhile.

For now, the signs are encouraging. The company has clearly decided that the AI boom is too big an opportunity to ignore. It is spending billions to build the infrastructure behind that boom, while working with some of the biggest names in technology. The latest quarter suggests that bet is starting to pay off. The next question is whether Oracle can turn that rapid growth into lasting profits and whether its massive investment in AI infrastructure will ultimately deliver the returns investors are hoping for.