Oracle bets big on cloud as it targets $225b in sales by 2030

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, the company says.

Reuters reported that the forecast was shared by Chief Executive Officer Clay Magouyrk during a meeting with analysts on Thursday, when he said 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.

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. That outlook is well above analysts’ expectations of $198.4 billion in sales and $18.92 per share in profits, based on data from LSEG.

As reported by CNBC, 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. He stressed that none of the new cloud bookings were from OpenAI.

“I know some people are questioning, ‘Hey, is it just OpenAI?’” Magouyrk told analysts. “The reality is, we think OpenAI is a great customer, but we have many customers. This is literally seven deals, four customers, all of them other than OpenAI.”

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. In contrast, traditional cloud services and enterprise software are expected to maintain margins between 65% and 80%.

Oracle illustrated the economics of its contracts with an example of a six-year, $60 billion deal in which annual costs would remain steady at around $6.4 billion. Kehring said the company only pursues projects that offer healthy, sustainable returns.

“I’ve read a lot of stories speculating that Oracle is chasing revenue for revenue’s sake,” Kehring said. “But let’s be crystal clear – we only pursue opportunities where we have a clear line of sight to attractive market margins that reward us for the intellectual property and value we bring to customers.”

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. Bloomberg had earlier reported that Oracle and Meta were in talks for a US$20 billion partnership.

In July, Oracle also secured a commitment from OpenAI worth more than US$300 billion. The large-scale contracts reflect a surge in demand for cloud and AI computing power in the tech sector.

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.

“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 said at Oracle’s AI World conference in Las Vegas. “As we’re able to find that supply, customers contract for it, we see immense demand, and then we go about delivering that to customers.”

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. Earlier reports from The Information suggested Oracle earned around a 14% margin from renting Nvidia AI chips during the August quarter.

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.

(Photo by Vladimir Solomianyi)

See also: Oracle details UK investment with sovereign cloud and AI plans

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