Oracle shares surge as AI cloud revenue set to hit $144B by 2030, fueled by major contracts with OpenAI, Meta, and AI infrastructure growth. Image: Yahoo finance
AI Ambitions Drive Oracle’s Stock to New Heights
Oracle shares jumped more than 25% in after-hours trading Tuesday. The rally followed the company’s projection that its AI-driven cloud revenue could reach a staggering $144 billion by fiscal 2030. Currently, the business is expected to bring in less than $20 billion.
CEO Safra Catz shared the outlook: “We expect Oracle Cloud Infrastructure revenue to grow 77% to $18 billion this fiscal year. Over the next four years, it could rise to $32 billion, $73 billion, $114 billion, and ultimately $144 billion.”
Quarterly Earnings Slightly Below Expectations
The surge in stock came despite Oracle reporting first-quarter revenue of $14.9 billion. Analysts had predicted $15 billion. Adjusted earnings per share landed at $1.47, just below the expected $1.48.
Even so, investors seemed focused more on Oracle’s future potential than short-term results.
Massive Contracts Boost Future Revenue
Oracle’s optimism is fueled by its growing backlog of customer contracts. The company’s remaining performance obligation (RPO)—future contract revenue—jumped 359% to $455 billion in Q1.
Catz noted, “We signed four multibillion-dollar contracts with three different customers. We expect to sign several more, pushing our RPO past half a trillion dollars.”
Major AI players are among Oracle’s new clients. “We have significant cloud agreements with OpenAI, xAI, Meta, and others,” Catz added.
Investing Heavily in AI Infrastructure
Oracle has secured vast numbers of Nvidia GPUs, renting the computing power through Oracle Cloud Infrastructure (OCI). The company aims to compete with tech giants like Amazon and Google in AI services.
To support this growth, Oracle plans to increase capital expenditures to around $35 billion in 2026, up from $25 billion previously projected and $21 billion last year.
At the same time, the company has trimmed staff and reportedly discussed pausing cash raises and bonuses this year.
Investor Excitement Over OpenAI Deal
Oracle’s stock has surged more than 70% in the past year. Market attention intensified after Oracle announced a deal projected to bring over $30 billion annually starting in fiscal 2028, widely linked to OpenAI.
While investors sought further details on Oracle’s involvement in the Stargate AI project, executives offered little comment.
Stargate AI Update
The Stargate initiative—a $500 billion AI infrastructure plan—was unveiled in January at the White House with Oracle, OpenAI, and SoftBank, alongside President Trump.
Following delays reported in July, OpenAI confirmed the Abilene, Texas, data center is partially operational. SoftBank, however, cautioned that progress has been slower than expected.
Catz previously said, “Stargate is not formed yet, but some of our business with OpenAI is part of our future.”
What’s Ahead
Oracle’s AI cloud ambitions signal a long-term strategy to dominate enterprise AI services. Investors appear willing to look past minor quarterly misses and focus on the company’s aggressive expansion and multibillion-dollar deals.
