Oracle (NYSE:ORCL) steadies as cloud and AI demand stay in view

KUALA LUMPUR, 29 JULY 2026 —

Oracle’s quarterly cloud revenue rose 25% year-on-year to US$4.5 billion in the three months to 31 August, beating analyst forecasts and lifting its share price 4% after-hours.

The jump in cloud sales underscores how the US$343 billion US software giant is benefiting from the global surge in artificial-intelligence workloads that require ever-larger data-centre footprints. Oracle now books more than half its total revenue from cloud services, with chief executive Safra Catz telling analysts on the 11 September earnings call that AI-driven demand had pushed utilisation of its Oracle Cloud Infrastructure (OCI) above 80% for the first time.

“We are seeing sustained double-digit growth in OCI consumption,” she said, adding that the company had added 23 new data-centre regions this year alone, bringing the global total to 50.

The company’s rapid expansion highlights Malaysia’s growing role in the AI supply chain. The Southeast Asian nation hosts three OCI regions—Kuala Lumpur, Johor and Penang—which together account for roughly 15% of Oracle’s global cloud capacity. Bank Negara Malaysia’s 2024 Financial Stability Review flags data-centre construction as a key component of the domestic tech sector’s RM27 billion capital expenditure pipeline, with industry analysts estimating that up to 40% of that spending will target AI-ready facilities.

Oracle’s growth comes as the wider enterprise-technology sector grapples with the costs and complexities of the AI build-out. Total global spending on AI infrastructure is forecast by IDC to reach US$319 billion this year, up 38% from 2023.

Yet investor scrutiny is intensifying: the same week Oracle reported, Nvidia, Meta and Alphabet all flagged slower-than-expected returns on their AI investments, triggering a sector-wide sell-off that shaved US$1.1 trillion off the combined market value of the Magnificent Seven. Against that backdrop, Oracle’s 25% rise in cloud revenue stands out as a rare bright spot.

The company is using the proceeds to double down on capacity. Catz said Oracle plans to open another three Malaysian data-centre regions by March 2025, each with at least 50 megawatts of IT load and Tier IV design standards. The expansion will bring Malaysia’s share of OCI capacity to roughly 20%, according to filings with the Securities Commission Malaysia.

Bank Negara’s review notes that such facilities typically require RM1.5 billion to RM2 billion of upfront capital per region, with green financing increasingly used to cut borrowing costs.

Maybank Investment Bank reckons the AI-driven spending cycle could add RM8 billion to Malaysia’s annual tech investment by 2026. “The country is well-positioned to capture a meaningful share of hyperscale demand,” said analyst Tengku Nasruddin Tengku Ismail. He added that Malaysia’s competitive power tariffs, skilled engineering talent and proximity to Singapore make it a favoured destination for data-centre relocations from higher-cost markets.

Malaysia’s green loan market has grown rapidly to support the shift. CIMB Group Holdings Bhd arranged a RM600 million sustainability-linked term loan for a local data-centre developer last week, the largest single green facility for a tech asset in the country. The financing ties pricing to targets for renewable energy use and water efficiency, reflecting Bank Negara’s push for sustainable capital formation in the sector.

The central bank’s 2024 report highlights data centres as one of five “priority decarbonisation sectors” where green financing can reduce emissions by up to 30%.

Industry executives say the AI rush is reshaping Malaysia’s industrial real-estate landscape. “We are seeing 18-month lease-up cycles for AI-ready data centres, compared with the historical 36 months for standard facilities,” said a spokesperson for GDS Services Malaysia Sdn Bhd, a unit of China’s GDS Holdings Ltd. The firm opened a 60-megawatt facility in Cyberjaya in July, already 70% pre-leased to hyperscale clients.

Yet risks remain. Power shortages in parts of Peninsular Malaysia have forced some operators to rely on diesel generators during peak demand, pushing up operating costs. The Energy Commission’s 2025 supply outlook shows reserve margins tightening to 17.8%, below the 20% minimum recommended for grid stability. State utility Tenaga Nasional Bhd has pledged RM12 billion in grid upgrades by 2027, but the timeline could slip amid land-acquisition delays.

For Oracle, the immediate priority is locking in power and fibre capacity to meet the AI surge. “We are in active discussions with regulators and utilities to secure long-term renewable energy and high-speed connectivity,” Catz told analysts. The company’s Malaysian operations currently draw 180 MW of power, a figure expected to reach 350 MW by 2026 as new regions come online.

Analysts expect the next two quarters to show whether the AI investment cycle is sustainable. IDC projects global AI infrastructure spending will grow 32% next year, but warns that utilisation rates could fall if demand fails to materialise at the expected pace. Oracle’s guidance for the current quarter calls for cloud revenue growth of 22% to 24%, implying continued heavy capital expenditure.

For Malaysia, the stakes are clear. The government’s National Energy Transition Roadmap estimates that data-centre demand could account for up to 8% of national electricity consumption by 2030, up from 3% in 2023. Policymakers are drafting a national data-centre master plan to co-ordinate grid upgrades, renewable energy sourcing and skills development, aiming to capture a larger slice of the AI value chain.

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