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Oracle Secures Nearly $7 Billion Enterprise Software Contract With Department of War

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Oracle Secures Nearly $7 Billion Enterprise Software Contract With Department of War

Oracle (ORCL) shares rose early Friday after the cloud computing company secured a 10-year enterprise software contract worth about $7 billion with the US Department of War.

The agreement has a base value of $3.31 billion for the first five years and an overall value of $6.99 billion if all options are exercised, the technology giant said late Thursday.

The contract will allow the Department of War organizations and contractors to procure Oracle's commercial offerings, including on-premises software and software-as-a-service applications, according to the company.

The stock gained 2.7% in the most recent premarket activity, having lost about 38% so far this year.

The deal enables "a more standardized and efficient path" for the DoW to obtain Oracle's cloud and artificial intelligence technology to support its mission-critical objectives, the company's executive vice president of government, defense and intelligence, Kim Lynch, said in a statement.

The contract will improve the Department of War's enterprise usage visibility and help optimize its technology budget, it said in a separate statement.

"This nearly $7 billion agreement with Oracle strengthens our digital ecosystem, supporting our warfighters with secure, scalable technology to dominate current and future missions," DoW Chief Information Officer Kirsten Davies said.

Last month, Oracle reported fiscal fourth-quarter results above Wall Street's estimates, buoyed by rising demand for cloud infrastructure driven by the AI boom. The company at the time maintained its fiscal 2027 revenue outlook and raised its non-GAAP earnings guidance to $8.05 per share.

In a client note last month, Wedbush Securities said Oracle was "taking the right steps" to address the massive AI opportunity ahead, with its record backlog providing the revenue visibility to support its capacity buildout.

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