TLDR
- Oracle secured $65 billion in cloud infrastructure commitments within 30 days from four customers including Meta
- The company projects revenue will reach $225 billion by fiscal 2030 with 31% annual growth rate
- AI database revenue expected to jump from $2.4 billion to $20 billion by 2030
- Jefferies upgraded Oracle price target to $400 citing accelerating AI and cloud momentum
- Stock rose 3% Thursday after Meta cloud deal confirmation
Oracle shares climbed 3% Thursday after CEO Clay Magouyrk revealed the company locked in $65 billion worth of new cloud infrastructure commitments in just one month.
The commitments span seven contracts from four major customers. Meta was confirmed as one of those customers, validating earlier Bloomberg reports about a potential $20 billion deal between the companies.
Magouyrk addressed speculation during Oracle’s AI World conference in Las Vegas. “None of those customers are OpenAI,” he said. “The reality is, we think OpenAI is a great customer, but we have many customers.”
Meta’s cloud spending aligns with its broader AI infrastructure push. The company expects to spend between $66 billion and $72 billion in capital expenditures this year.
Ambitious 2030 Financial Targets
Oracle outlined aggressive growth projections for fiscal 2030. Total revenue is expected to hit $225 billion, reflecting a 31% compound annual growth rate.
The company targets $21 in adjusted earnings per share by 2030. This exceeds analyst expectations of $18.92 per share on $198.39 billion in revenue.
AI-powered database and data platform revenue will grow from $2.4 billion in fiscal 2025 to $20 billion by fiscal 2030. Oracle Cloud Infrastructure revenue is projected to reach $166 billion by 2030, growing at a 75% compound annual rate.
“You see the change in these numbers that it’s a little bit easier for us to find supply, not this year or next year, but in subsequent years,” Magouyrk explained. “So as we’re able to find that supply, customers contract for it, we see immense demand.”
Analyst Confidence Grows
Jefferies raised its Oracle price target to $400 from $360. The firm maintained its “Buy” rating, calling Oracle’s trajectory “a rare acceleration story in software.”
The brokerage highlighted Oracle’s position in the AI infrastructure market. Supply-demand imbalances continue to favor cloud providers with capacity.
Oracle’s principal financial officer Doug Kehring defended the company’s profitability strategy. “We only pursue opportunities where we have a clear line of sight to attractive market margins,” he said.
AI infrastructure delivers adjusted gross margins between 30% and 40% after accounting for data center costs. The Information previously reported Oracle achieved 14% gross margins on Nvidia AI chip rentals in the August quarter.
Oracle secured a commitment exceeding $300 billion from OpenAI in July. The company’s “One-Oracle” strategy integrates database, applications, infrastructure, and AI services.
Jefferies noted this approach positions Oracle as an emerging hyperscaler in the global cloud market. Oracle has expanded beyond its traditional database business to compete with Amazon and Google in cloud infrastructure.
The stock dipped 2% in after-hours trading despite exceeding analyst projections. Oracle’s five-year roadmap calls for revenue to nearly quadruple from current levels.
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