Oracle is betting big on the cloud as it projects $225 billion in revenue by 2030

Oracle expects its cloud infrastructure business to generate $166 billion in revenue by fiscal 2030, accounting for nearly three-quarters of its total revenue, the company says.

Reuters said the forecast was shared by CEO Clay Magouyrk during a meeting with analysts on Thursday, when he said new cloud bookings are coming from a broad customer base — not just OpenAI, which has become one of Oracle’s most talked-about customers.

Doug Kehring, Oracle’s chief financial officer, said the company expects total revenue to reach $225 billion and adjusted earnings of $21 per share by 2030. That outlook is well above analysts’ expectations of $198.4 billion in revenue and $18.92 per share in earnings, based on data from LSEG.

As he states CNBCOracle shares closed up 3% after the briefing, although they fell about 2% in after-hours trading after investors weighed the company’s long-term goals for cloud growth.

Oracle’s cloud offerings increase 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 centers. In the most recent quarter, cloud revenue grew 28% year-over-year to $7.2 billion, underscoring continued demand for Oracle Cloud services.

Magouyrk said Oracle Cloud Infrastructure saw $65 billion in new commitments in 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 emphasized that none of the new cloud bookings came from OpenAI.

“I know some people are asking, ‘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 offerings, four customers, all non-OpenAI.”

Solving margin problems

Oracle also sought to reassure investors about profitability in its growing AI cloud infrastructure segment. The company’s gross margin was 68.7% in the most recent quarter, and analysts expect a slight decline through 2027.

The company projected an adjusted gross margin of between 30% and 40% for AI cloud infrastructure, reflecting the high upfront costs of land, data centers, 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 using the example of a six-year, $60 billion deal where annual costs would remain stable at around $6.4 billion. Kehring said the company only pursues projects that offer healthy and 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 idea of ​​attractive market margins that reward us for the intellectual property and value we bring to customers.”

Meta and other important customers

The deal with Meta highlights Oracle’s growing role in providing infrastructure for AI development as the tech giants continue to invest heavily in computing capacity. Meta announced earlier this year that it expects to spend $66 billion to $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 previously reported that Oracle and Meta are in talks for a $20 billion partnership.

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

Expanding Oracle’s cloud business

In recent years, Oracle has focused on expanding its cloud infrastructure division, which directly competes with Amazon Web Services and Google Cloud. The company has also made its database software available on external cloud platforms, extending its reach beyond its own infrastructure.

Oracle expects to generate $20 billion in revenue from its AI-powered database and data platforms by fiscal 2030 — up from $2.4 billion in 2025 and $3 billion in 2026.

“You see a change in those numbers that it’s a little bit easier for us to find an offer, not this year or next year, but in the years to come,” Magouyrk said at the Oracle AI World conference in Las Vegas. “As we’re able to find that supply, customers contract for it, we see huge demand, and then we deliver it to customers.”

Long-term view

After the 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. Shares fell 2% in extended trading after the announcement.

The company said its AI infrastructure margins — between 30% and 40% — are in line with long-term plans for sustainable profitability, despite higher energy and hardware costs. Previous reports from Information suggested Oracle earned about 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 heats up. The company believes its long-term contracts with AI firms such as OpenAI and Meta will help ensure growth for 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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