Key Stats for Oracle Stock
- Price Change for $ORCL stock: -2%
- Current Share Price: $306
- 52-Week High: $345
- $ORCL Stock Price Target: $334
What Happened?
Oracle (ORCL) stock is down 2% after the company announced aggressive new financial targets and revealed a major cloud infrastructure deal with Meta at its AI World conference in Las Vegas.
The database giant raised its fiscal 2030 outlook dramatically, now targeting $225 billion in revenue and $21 in adjusted earnings per share. That represents a 31% compound annual growth rate over the next five years.
Analysts had been expecting just $198.6 billion in revenue and earnings of $18.46 per share in fiscal 2030, making Oracle’s new targets roughly 13% higher than Wall Street estimates.
The company also disclosed that it signed $65 billion in new cloud infrastructure commitments during a 30-day period in the current quarter. These contracts came from seven different deals across four customers, including Meta.
Clay Magouyrk, one of Oracle’s two new co-CEOs, emphasized that OpenAI wasn’t among these four customers, pushing back on speculation that Oracle’s growth depends too heavily on any single client.
Oracle highlighted explosive growth expectations for its AI-powered database business. The cloud heavyweight sees AI database and data platform revenue reaching $20 billion by fiscal 2030, up from just $2.4 billion in fiscal 2025 and $3 billion expected in fiscal 2026.
This represents roughly 8x growth over five years in a market Oracle believes it dominates with limited competition remaining.
The company addressed investor concerns about profit margins on AI infrastructure deals. Oracle said AI infrastructure carries adjusted gross margins of 30% to 40% after accounting for land, data center, power, and equipment costs.
CFO Doug Kehring stated clearly that the company only pursues opportunities with attractive margins that reward its intellectual property.
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What the Market Is Telling Us About Oracle Stock
The 2% decline in Oracle stock does not reflect investor enthusiasm for the company’s positioning in the AI infrastructure buildout.
The $65 billion in new commitments during just one month demonstrates the scale of demand Oracle is capturing from major tech companies racing to expand AI capabilities.
Meta’s participation as a customer is significant, given that the social media behemoth expects to spend $66 billion to $72 billion on capital expenditures this year for AI initiatives.
Oracle is competing successfully against Amazon and Google in cloud infrastructure while also offering its database across multiple clouds, creating multiple revenue streams from the AI boom.
Oracle stock dipped 2% in after-hours trading despite the raised guidance, suggesting some investors may be concerned about execution risk given the aggressive targets.
It is projecting revenue to grow nearly 4x and earnings per share to grow roughly 4x over five years. Meeting these numbers requires Oracle to successfully convert its massive remaining performance obligations backlog, which now exceeds $500 billion, into actual revenue.
The AI database opportunity appears compelling due to limited direct competition. Oracle’s ability to make private enterprise data accessible to AI models while maintaining security gives it a unique position.
The challenge will be maintaining 30% to 40% margins on infrastructure deals while scaling capacity quickly enough to meet customer demand.
Management acknowledged that supply constraints remain the primary growth limiter rather than customer demand.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!