TLDR
- Oracle (ORCL) shares gained Wednesday after winning an $88 million U.S. Air Force cloud infrastructure contract
- The three-year deal runs through December 2028 and covers Oracle Cloud Infrastructure services for the Cloud One program
- Recent stock weakness stemmed from investor concerns about revenue growth despite Q2 cloud revenue jumping 34% to $8 billion
- The contract strengthens Oracle’s position in Department of Defense cloud modernization initiatives
- Premarket trading showed Oracle stock up 0.78% to $158.40 following the announcement
Oracle shares moved higher Wednesday after the company announced an $88 million contract with the U.S. Air Force. The deal provides fresh momentum for the stock following recent declines.
The firm-fixed price task order extends through December 7, 2028. Oracle will deliver Cloud Infrastructure services to support Cloud One, the Air Force’s centralized cloud-hosting initiative.
The stock had traded in negative territory recently. Concerns about slowing revenue growth pressured shares despite strong cloud segment performance in the latest quarter.
Cloud revenue climbed 34% to $8 billion in Oracle’s second quarter of fiscal 2026, which concluded in November. The growth failed to satisfy investors worried about the company’s overall revenue trajectory.
Department of Defense Partnership Grows
The new contract allows DoD customers to access Oracle Cloud Infrastructure across multiple security classification levels. Users gain access to advanced security features including the Secure Cloud Computing Architecture.
Oracle AI Database 26ai comes included in the package. Government customers can combine classified and public data when running AI workflows while maintaining security protocols.
Work will take place at Oracle facilities throughout the United States. The task order covers services for Cloud One and government customers across the Air Force and wider DoD enterprise.
Oracle characterized the deal as strengthening its role in the Department of Defense’s cloud modernization strategy. The Texas-based software company has expanded its government cloud presence in recent years.
Stock Rebounds From Recent Weakness
Oracle shares turned positive only in the last two trading sessions. The stock faced selling pressure as investors questioned growth rates despite robust cloud performance metrics.
The Air Force awarded the task order on Thursday. Oracle stock rose 0.78% in premarket activity to $158.40 on the news.
The Cloud One program enables DoD customers to utilize OCI’s security, performance and resiliency capabilities. Different agencies can deploy the platform based on specific classification requirements.
Oracle will provide services across multiple classification tiers under the agreement. This structure offers flexibility for various government entities with different security needs.
The contract adds to Oracle’s portfolio of major government deals. The company has positioned itself as a preferred vendor for sensitive government cloud workloads requiring enhanced security.
Second quarter fiscal 2026 cloud revenue reached $8 billion, marking 34% year-over-year growth. Despite the strong performance, investors remained cautious about broader revenue trends.
Premarket quotes showed Oracle trading at $158.40, representing a 0.78% gain. The Air Force contract helped reverse recent negative price action in the shares.
The deal reinforces Oracle’s competitive position in government cloud services. Cloud One participants can now leverage advanced AI capabilities while meeting DoD security standards.
