Shares of Oracle (ORCL) rose on Thursday after the tech giant confirmed a cloud-computing deal with social media titan Meta (META) and shared strong growth expectations for its AI business. At its AI World conference in Las Vegas, Oracle stated that it expects to generate $20 billion in revenue from its AI-powered database and data platform by Fiscal Year 2030. That’s a big jump from the $2.4 billion expected in 2025 and the $3 billion anticipated in 2026.
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Furthermore, Clay Magouyrk, one of Oracle’s two new co-CEOs, told analysts that in just 30 days of the current quarter, Oracle signed $65 billion in new cloud infrastructure commitments. Importantly, these came from seven contracts with four different customers, not including OpenAI, and one of those customers is Meta, which Bloomberg reported in September was discussing a $20 billion deal with Oracle. Unsurprisingly, Meta has been investing heavily in AI infrastructure, with plans to spend up to $72 billion this year alone on capital expenses.
Oracle has also been expanding its cloud infrastructure business in order to compete with Amazon (AMZN) and Google (GOOGL), while making its database available on third-party cloud platforms. Moreover, in July, the company secured a commitment from OpenAI worth more than $300 billion, which Magouyrk said OpenAI could afford when recently asked by CNBC. In addition, Oracle noted that its AI infrastructure generates adjusted gross margins of 30% to 40%, even after accounting for costs such as land, data centers, electricity, and hardware.
Is ORCL Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 26 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $346.63 per share implies 10.5% upside potential.
