Oracle stock soars 42% on bullish $144 billion AI cloud revenue forecast

Oracle shares rocketed after it stunned investors with forecasts of $144 billion revenue by 2030, fueled by an AI-driven cloud computing boom.

The predicted cashflow represents a giant leap from projections of just $18 billion for the current fiscal year, and has led to Oracle shares gaining 42% on Wednesday morning in New York.

"We expect Oracle Cloud Infrastructure revenue to grow 77% to $18 billion this fiscal year — and then increase to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years," chief executive Safra Catz said in a statement on Tuesday evening.

The forecast jolted analysts and overshadowed an otherwise underwhelming first quarter balance sheet, which saw earnings per share and revenue come in beneath expectations, at $1.47 and $14.9 billion, respectively.

The Austin, Texas-based company said revenue was 12% up year-on-year for the three months to Aug. 31, while net income was roughly flat at $1.01 per share.

But it was the forward looking projections that stunned Wall Street. The company said it signed four multibillion-dollar contracts with three different customers in the quarter, resulting in its contract backlog growing 359% to $455 billion in the period.

Catz added that she expects to sign up several more multibillion-dollar customers, and that its remaining performance obligation (RPO), or the amount of contract income Oracle will get in the future based on customer agreements, will rise above half-a-trillion dollars. The CEO called it an "astonishing" quarter.

She said on a call with investors: "We have signed significant cloud contracts with the who's who of AI, including OpenAI, xAI, Meta, and many others."

Investors are pouring money into cloud providers powered by artificial intelligence, and competitors to Oracle are also reporting strong growth in their cloud businesses.

The growth underscores how rising corporate demand for AI infrastructure is boosting the entire sector. The momentum has pushed chipmakers’ stocks higher in early trading, with AMD climbing about 3% and Nvidia gaining roughly 2.2%.

Russ Mould, an analyst at AJ Bell, said the earnings sent “a strong message to the broader market that the tech revolution is still red hot.”a

Oracle has secured partnerships with Amazon, Alphabet’s Google, and Microsoft to operate its Cloud Infrastructure on their platforms. Revenue from these collaborations surged 1,529% in the first quarter.