Oracle’s stock surged by 27% in extended trading on Tuesday after the software giant outlined an ambitious expansion plan for its cloud infrastructure, despite narrowly missing quarterly earnings and revenue estimates.
During its earnings call, CEO Safra Catz announced that Oracle signed four multi-billion-dollar cloud contracts in the first quarter, boosting the company’s remaining performance obligations—the value of signed contracts not yet recognized as revenue—to $455 billion, a 359% increase from the previous year. This figure now stands at nearly four times that of Google Cloud’s $106 billion.
Oracle expects additional multi-billion-dollar contracts in the coming months, potentially pushing future obligations to over half a trillion dollars. Among its largest deals over the past quarter is a contract with the US Department of Agriculture, signed in April.
The company’s cloud infrastructure revenue surged 55% year-over-year to $3.3 billion in the last quarter, and Oracle forecasts it will reach $18 billion in the next fiscal year—a 77% jump from the previous period. Looking ahead, Oracle aims for $144 billion in annual cloud revenue by 2030, far surpassing industry expectations.
Founder Larry Ellison emphasized the company’s multi-cloud strategy, noting plans to expand its data centers to 71, including partnerships with hyperscalers. Oracle’s access to Nvidia GPUs and collaborations with OpenAI through Project Stargate further bolster its cloud offerings. In July, Oracle committed 4.5 gigawatts of data center capacity to support OpenAI’s infrastructure, and it plans to launch an Oracle AI Database service by October, allowing clients to run AI models on proprietary data.
While Oracle’s cloud revenue still trails industry leaders like AWS ($112 billion) and Microsoft Azure ($75 billion), investors remain bullish, with shares rising 45% year-to-date and a market cap approaching $800 billion.
