Oracle has set ambitious goals for its cloud infrastructure business, aiming to generate $166 billion in revenue by fiscal year 2030, making up the majority of its total sales. CEO Clay Magouyrk shared this forecast with analysts, highlighting that new cloud bookings are coming from a diverse range of customers, not just OpenAI.
Oracle’s CFO Doug Kehring also outlined the company’s overall revenue projection of $225 billion and adjusted profits of $21 per share by 2030, surpassing analysts’ expectations. The stock saw a 3% increase following the announcement, although it dipped 2% in after-hours trading as investors assessed the long-term cloud growth targets.
Recent cloud deals, including a $500 billion project with OpenAI and a $20 billion agreement with Meta Platforms, have propelled Oracle’s cloud revenue, which grew by 28% year-on-year to $7.2 billion in the latest quarter. Magouyrk emphasized that Oracle has a diverse customer base beyond OpenAI, with seven deals involving four other major clients.
Addressing concerns about margins, Oracle assured investors about the profitability of its AI cloud infrastructure segment, projecting adjusted gross margins of 30% to 40%. The company illustrated the economics of its contracts with a $60 billion deal, emphasizing its focus on pursuing opportunities with sustainable returns.
Oracle’s partnerships with Meta and OpenAI underscore its role in providing infrastructure for AI development, as tech giants ramp up their investments in computing capacity. The company’s expansion of its cloud business, competing with Amazon Web Services and Google Cloud, is expected to yield significant revenue growth from AI-powered databases and data platforms.
Looking ahead, Oracle remains confident in its long-term outlook, reaffirming its targets of $225 billion in revenue and $21 per share in adjusted earnings by 2030. Despite higher costs associated with energy use and hardware, the company is optimistic about the sustainable profitability of its AI infrastructure margins. Oracle’s bullish forecast reflects its growing confidence in the cloud business, driven by strategic partnerships and a focus on long-term growth.
