Oracle forecasts cloud revenue to reach $166B by 2030
What's the story
Oracle has projected its cloud infrastructure revenue will hit $166 billion by fiscal year 2030. This would account for nearly three-quarters of the company's total sales during that period. The prediction was made by CEO Clay Magouyrk during a recent meeting with financial analysts. He also revealed that new bookings are coming from a variety of customers, not just OpenAI, which is currently working with Oracle on a $500 billion project involving five new data centers.
Revenue forecast
CFO's forecast on overall revenue and profits
Oracle's executive vice president, Dough Kehring, has said the company expects an overall revenue of $225 billion and adjusted profits of $21 per share by fiscal 2030. This is significantly higher than analyst expectations of $198.4 billion in total sales and adjusted profits of $18.92 per share for the same period, according to LSEG data. After the cloud computing announcement, Oracle shares rose by 3% but fell about 2% in after-hours trading due to broader revenue and profit forecasts.
Growth trajectory
Cloud revenue surged by 28% last quarter
In the last quarter, Oracle's cloud revenue surged by 28% to $7.2 billion. Magouyrk revealed that in a single 30-day period last quarter, Oracle Cloud Infrastructure booked $65 billion in new commitments. This included a $20 billion deal with Meta Platforms. He emphasized that these recent bookings came from customers other than OpenAI, dispelling doubts about its customer base.
Margin stability
Oracle addresses investor concerns over gross margins
Addressing investor concerns over its gross margins, which were 68.7% in the last quarter and are expected to dip slightly in fiscal 2027, Oracle has provided some clarity. The company expects adjusted gross margins between 30% and 40% for AI cloud computing infrastructure delivery. Other segments like traditional cloud software and business customer infrastructure will have margins between 65% and 80%.