Introduction to Oracle’s Cloud Infrastructure
Oracle expects its cloud infrastructure business to create $166 billion in revenue by fiscal year 2030, accounting for nearly three-quarters of its total sales. This forecast was shared by Chief Executive Officer Clay Magouyrk during a meeting with analysts. New cloud bookings are coming from a broad base of customers, not just OpenAI, which has become one of Oracle’s most talked-about clients.
Oracle’s Financial Projections
Doug Kehring, Oracle’s chief financial officer, said the company projects overall revenue to reach $225 billion and adjusted profits of $21 per share by 2030. This outlook is well above analysts’ expectations of $198.4 billion in sales and $18.92 per share in profits. Oracle’s stock closed up 3% in value following the briefing, though it fell about 2% in after-hours trading after investors weighed the company’s long-term cloud growth targets.
Oracle’s Cloud Deals Driving Bookings
Last month, Oracle said it had secured hundreds of billions of dollars in cloud infrastructure bookings, including a $500 billion project with OpenAI to build five new data centres. In the latest quarter, cloud revenue rose 28% year-on-year to $7.2 billion, highlighting continued demand for Oracle Cloud services. Magouyrk said Oracle Cloud Infrastructure recorded $65 billion in new commitments during a single 30-day period last quarter. Among them was a $20 billion cloud deal with Meta Platforms, the parent company of Facebook and Instagram.
Addressing Margin Concerns
Oracle also sought to reassure investors about profitability in its growing AI cloud infrastructure segment. The company’s gross margin stood at 68.7% in its most recent quarter, and analysts expect a slight decline by 2027. The company projected adjusted gross margins of between 30% and 40% for AI cloud infrastructure, reflecting high upfront costs for land, data centres, power, and computing equipment.
Meta and Other Major Customers
The deal with Meta highlights Oracle’s growing role in supplying infrastructure for AI development, as technology giants continue investing heavily in computing capacity. Meta announced earlier this year that it expects to spend between US$66 billion and US$72 billion in capital expenditures in 2025 to support its AI efforts. Magouyrk confirmed that Meta was one of four customers behind Oracle’s recent $65 billion in bookings.
Expanding Oracle’s Cloud Business
In recent years, Oracle has focused on expanding its cloud infrastructure division, which competes directly with Amazon Web Services and Google Cloud. The company has also made its database software available on external cloud platforms, broadening its reach beyond its own infrastructure. Oracle said it expects to generate US$20 billion in revenue from AI-powered databases and data platforms by fiscal 2030 – a sharp rise from US$2.4 billion in 2025 and US$3 billion in 2026.
Long-term Outlook
After markets closed, Oracle reaffirmed its 2030 targets of $225 billion in revenue and adjusted earnings of $21 per share, representing a 31% compound annual growth rate. Stock slipped 2% in value in extended trading after the announcement. The company said its AI infrastructure margins – between 30% and 40% – are consistent with long-term plans for sustainable profitability, despite higher costs linked to energy use and hardware.
Conclusion
Oracle’s bullish forecast signals growing confidence in its cloud business, even as competition intensifies. The company believes its long-term contracts with AI-focused firms like OpenAI and Meta will help secure growth through the rest of the decade. With its expanding cloud infrastructure division and growing role in supplying infrastructure for AI development, Oracle is well-positioned for success in the years to come.
FAQs
Q: What is Oracle’s expected revenue from its cloud infrastructure business by fiscal year 2030?
A: $166 billion
Q: What is the expected overall revenue of Oracle by 2030?
A: $225 billion
Q: What is the expected adjusted profit per share of Oracle by 2030?
A: $21
Q: Who are some of Oracle’s major customers in its cloud infrastructure business?
A: OpenAI, Meta Platforms
Q: What is the expected revenue from AI-powered databases and data platforms by fiscal 2030?
A: US$20 billion
