<p><strong>Oracle</strong> <span class="ticker-mention inline-flex items-center font-bold">(ORCL <span class="ml-1 text-green-900">+0.78%</span>)</span>, one of the biggest players in the artificial intelligence (AI) hardware ecosystem, released its fiscal 2026 results (for the year ended May 31) on June 10.</p>
<p>The reaction to the company's financial results wasn't great, as concerns about its fast-growing capital expenditures and mounting debt to finance the build-out of new data centers led investors to press the panic button. However, Oracle's results make it clear that the investments in AI data center infrastructure won't be slowing down any time soon, which is great news for <strong>Nvidia</strong> <span class="ticker-mention inline-flex items-center font-bold">(NVDA <span class="ml-1 text-green-900">+0.58%</span>)</span>.</p>
<div><img alt="Nvidia company name and logo written in white on a green background." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NzQ4MTMvbnZkYV90bWYucG5nJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NzQ4MTMvbnZkYV90bWYucG5nJnc9Mzg0MA"/>
<p>Image source: The Motley Fool.</p>
</div>
<h2>Oracle has indicated that GPU demand remains solid</h2>
<p>A closer look at Oracle management's comments on the latest earnings call indicates that demand for graphics processing units (GPUs) in data centers remains robust. Oracle noted that the global utilization rate of GPUs in data centers stood at a solid 97.5% last quarter.</p>
<p>This high utilization rate suggests that GPUs remain in high demand for running AI workloads in data centers. This bodes well for Nvidia, which controls an estimated 80%-90% of the AI accelerator market. What's more, Oracle is on track to significantly increase its capital expenditure this year, suggesting that the demand for Nvidia's GPUs will continue to increase.</p><div><div id="foolcom_sidebar_top_container"><div><div><div></div><div></div><div></div></div></div><div></div></div></div>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Nvidia Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL05WREEucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL05WREEucG5nJnc9MTI4"/></div><div><h2>NASDAQ: NVDA</h2><div>Nvidia</div></div></div><div><div><div>Today's Change</div><div>(0.58%) $1.20</div><div>Current Price</div><div>$208.61</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$5.0T</div><div>Day's Range</div><div>$207.56 - $208.82</div><div>52wk Range</div><div>$142.03 - $236.54</div><div>Volume</div><div>417.7K</div><div>Avg Vol</div><div>163.7M</div><div>Gross Margin</div><div>74.15%</div><div>Dividend Yield</div><div>0.13%</div></div></div></div></section>
<p>Oracle expects $70 billion in capex in fiscal 2027, with another $20 billion to $25 billion to be funded by customer prepayments. This will bring Oracle's overall capex in fiscal 2027 to a range of $90 billion to $95 billion, well above the $56 billion spent in fiscal 2026 ($8 billion of which was funded by prepayments).</p><div></div>
<p>The substantial acceleration in Oracle's capital spending reflects the broader AI infrastructure space. According to <strong>Gartner</strong>, global AI infrastructure spending could jump to $1.36 trillion this year, followed by $1.75 trillion in 2027. Nvidia's status as the leading player in the AI chip market puts it in a terrific position to capitalize on this massive AI infrastructure spending, especially given that GPUs continue to dominate the chip landscape despite the emergence of competing offerings.</p><div><div id="in_line_article_pitch_container"><div><div><div><div></div></div><div><div></div><div></div><div></div></div></div></div><div></div></div></div>
<h2>This is yet another sign to buy Nvidia stock</h2>
<p>The aggressive growth in Oracle's capex, and the fact that its remaining performance obligations jumped to a whopping $638 billion in the previous quarter from $138 billion a year ago, indicate that Nvidia's addressable market continues to expand rapidly. Not surprisingly, the company is forecasting its growth rate to accelerate.</p>
<p>Nvidia's earnings are expected to jump by 88% in the ongoing fiscal 2027, well above the 23% earnings growth of the <strong>S&amp;P 500</strong> index. The 42% earnings growth projection for the next fiscal year to $12.73 per share also exceeds the 17% growth in the S&amp;P 500. With an earnings multiple of 31, investors can now buy Nvidia stock at a discount to the tech-focused Nasdaq-100 index's earnings multiple of 35.</p>
<p>If Nvidia indeed achieves $12.73 in earnings per share in fiscal 2028 (which will end in January 2028) and trades at even 25 times earnings, its stock price could reach $318, suggesting a potential jump of 50%. However, the company can do much better than that, as its outstanding earnings growth should ideally be rewarded with a premium valuation.</p><div id="article_pitch_container"><div><div><div></div><div></div><div></div><div></div><div></div><div></div><div></div></div></div><div></div></div><div id="promobox_container"><div><div><div></div><div></div><div></div><div></div></div></div><div></div></div>

NVDA

ORCL

07388

<p>Oracle's fiscal 2026 results highlight robust GPU demand, with data center utilization at 97.5%, benefiting Nvidia, which holds 80-90% of the AI accelerator market. Oracle plans to increase capital expenditure to $90-$95 billion in fiscal 2027, signaling sustained investment in AI infrastructure. This growth supports Nvidia's projected earnings surge and potential stock appreciation, as global AI spending rises significantly.</p>

- Oracle released its fiscal 2026 results on June 10, showing concerns over rising capital expenditures and debt, which unsettled investors.  
- Despite this, Oracle's commitment to AI infrastructure investment indicates strong and ongoing demand for graphics processing units (GPUs), particularly benefiting Nvidia, which controls a significant portion of the AI accelerator market.  
- Nvidia's projected earnings growth in fiscal 2027 exceeds industry averages, suggesting a potential stock price increase as demand for AI technologies rises sharply.

Oracle Has Fantastic News for Nvidia Stock Investors