Oracle (ORCL) experienced a significant surge in its stock price, climbing as much as 39% in early trading on Wednesday. This remarkable uptick followed the company’s announcement regarding its ambitious projections for AI-driven cloud revenue, which is expected to soar to $144 billion by its 2030 fiscal year. This rise represents a staggering increase from the current fiscal year’s estimated revenue of less than $20 billion in the cloud segment.
CEO Safra Catz revealed the company’s forecast in a statement, highlighting an anticipated 77% growth for Oracle Cloud Infrastructure revenue, projected to reach $18 billion within this fiscal year. This number is expected to climb to $32 billion the following year, with further increases to $73 billion, $114 billion, and ultimately $144 billion in the following successive years.
Despite this optimistic outlook, Oracle reported first-quarter earnings for fiscal year 2026 that did not meet Wall Street’s expectations. The company posted revenue of $14.9 billion, just shy of the $15 billion forecasted by analysts. Additionally, its adjusted earnings per share came in at $1.47, falling below the anticipated $1.48.
The optimistic revenue projection was bolstered by an increase in the company’s remaining performance obligation (RPO), which reflects the total value of future contract revenue still to be delivered. Catz noted that Oracle secured four multibillion-dollar contracts during the first quarter, which contributed to a staggering 359% increase in its contract backlog, now totaling $455 billion.
The announcement highlighted numerous significant cloud contracts established with prominent companies in the AI sector, including OpenAI, xAI, and Meta. Oracle has been heavily investing in acquiring Nvidia’s highly sought-after GPUs to bolster its cloud computing capabilities, aiming to compete with major tech rivals like Amazon and Google. As part of its aggressive AI strategy, Oracle has committed billions to enhance its data center infrastructure, even while making workforce adjustments and discussing potential cuts to cash raises and bonuses for employees in the coming year.
The company also revised its capital expenditures forecast for 2026, now expected to be around $35 billion, an increase from an earlier estimate of $25 billion and from $21 billion the previous year. Oracle’s stock has shown remarkable performance, surging more than 70% over the past year.
In a recent quarterly earnings call, Oracle gained further attention from investors with the announcement of a new deal expected to generate upwards of $30 billion annually starting in its 2028 fiscal year. While multiple media sources reported that the customer is OpenAI, executives refrained from providing additional commentary or details regarding the agreement.
Investors are also keenly interested in updates concerning Oracle’s involvement in the Stargate AI project, a monumental $500 billion infrastructure initiative disclosed in January at the White House by the CEOs of Oracle, OpenAI, and SoftBank, alongside President Trump. Despite concerns over potential delays, OpenAI confirmed that its partnership with Oracle aimed at establishing a data center in Abilene, Texas, as part of the Stargate project was “progressing,” although subsequent comments from SoftBank indicated the rollout may be taking longer than initially anticipated.
Catz’s last public update on Stargate indicated that while the project is still in formation, there are business engagements underway with OpenAI that may influence Oracle’s future prospects.
