Oracle Corporation (ORCL) Stock: Jump 29% as AI Cloud Revenue Projected to Hit $144 Billion by 2030

TLDR

Table of Contents

Oracle stock jumped 29% in premarket trading after projecting AI-fueled cloud revenue will reach $144 billion by fiscal 2030
Company’s remaining performance obligation backlog surged 359% to $455 billion in Q1, driven by four multibillion-dollar contracts
First quarter earnings missed expectations with $1.47 EPS vs $1.48 expected and revenue of $14.9 billion vs $15.0 billion expected
Oracle signed major cloud contracts with OpenAI, xAI, Meta and other top AI companies during the quarter
Capital expenditures will jump to roughly $35 billion in fiscal 2026, up from previous outlook of $25 billion

Oracle Corporation’s stock price rocketed 29% in premarket trading Wednesday after CEO Safra Catz delivered a stunning forecast for the company’s cloud business. The software giant projects its AI-fueled cloud infrastructure revenue will reach $144 billion by fiscal year 2030.

This projection represents a massive leap from Oracle’s current expectations of less than $20 billion for the business this fiscal year. The company expects Oracle Cloud Infrastructure revenue to grow 77% to $18 billion this fiscal year.

Catz outlined an aggressive growth trajectory for subsequent years. Revenue is projected to increase to $32 billion, then $73 billion, $114 billion, and finally $144 billion over the next four years.

The dramatic stock surge came despite Oracle reporting mixed first quarter results. The company posted adjusted earnings per share of $1.47, missing Wall Street’s expectation of $1.48.

Revenue for the quarter reached $14.9 billion, slightly below the $15 billion analysts expected. Despite these misses, investors focused on Oracle’s forward-looking guidance and contract wins.

The company’s remaining performance obligation backlog tells a different story than the quarterly results. This metric, which represents the total value of contract revenue Oracle will deliver based on customer agreements, jumped 359% to $455 billion.

Major Contract Wins Drive Growth

Oracle secured four multibillion-dollar contracts with three different customers during the first quarter. Catz expects the company to sign several additional multibillion-dollar customers in coming months.

The CEO revealed Oracle has signed cloud contracts with major AI players. These customers include OpenAI, xAI, Meta, Nvidia, AMD and other leading companies in the space.

“Someone called us: ‘We’ll take all the capacity you have that’s currently not being used anywhere in the world. We don’t care,'” Chairman Larry Ellison said during the earnings call. “And I’ve never gotten a call like that.”

Oracle has been aggressively securing Nvidia’s coveted GPUs and renting out that computing power through its cloud infrastructure business. This strategy positions the company to compete with Big Tech peers like Amazon Web Services and Google Cloud.

Investment in Infrastructure

The company is making massive investments to support this growth. Oracle expects capital expenditures to reach roughly $35 billion in fiscal 2026.

This represents a jump from the company’s previous outlook of around $25 billion for the year. Last year’s capital expenditures totaled $21 billion.

Oracle has been pouring billions into data center infrastructure to fuel its AI ambitions. The company has simultaneously laid off workers and reportedly discussed eliminating cash raises and bonuses for employees this year.

Stargate Project Updates

Investors looked for updates on Oracle’s role in the Stargate AI project during the earnings call. The $500 billion AI infrastructure deal was announced in January at the White House by Oracle, OpenAI, and SoftBank CEOs alongside President Trump.

Executives provided no new details on Stargate during Tuesday’s call. After reports that the project was stalling in July, OpenAI said its partnership with Oracle for a data center in Abilene, Texas was “progressing.”

Some of the Abilene facility is already “up and running” according to OpenAI. However, SoftBank later indicated Stargate is taking longer than expected to get off the ground.

Catz’s last comment on Stargate came during the previous quarter. “Stargate is not formed yet,” she said. “But some of our business with OpenAI is part of our future.”

Oracle shares have gained more than 70% over the past year as the company transitions from traditional database software to cloud infrastructure services. The stock closed Tuesday at $241.51 before jumping to over $322 in premarket trading Wednesday.

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