Oracle (ORCL, Financial) recently announced several significant cloud service agreements, with one expected to generate over $30 billion in annual revenue starting in fiscal year 2028. This milestone highlights Oracle's growing influence in the cloud infrastructure market, particularly in the AI era. Oracle's CEO, Safra Catz, reported that the company's multi-cloud database revenue continues to grow at over 100%, reflecting strong market demand.
Following these announcements, Oracle's stock price surged, reaching a new all-time high. The stock saw pre-market gains of over 7%, with intraday gains exceeding 8%, before closing up about 4%. This increase underscores investor confidence in Oracle's cloud strategy.
Investment firm Stifel upgraded Oracle's rating from hold to buy, raising the target price by nearly 39% to $250. Analyst Brad Reback cited sustainable cloud growth and operational expense management as key factors for accelerated earnings growth beyond fiscal year 2027. Despite short-term pressure from increased capital expenditures, Oracle's management has demonstrated effective cost control.
Oracle has become a preferred third-party cloud provider for leading AI model companies, partnering with NVIDIA. The company's cloud infrastructure is now a viable alternative to industry giants like Amazon, Microsoft, and Alphabet, contributing to a 60% stock increase last year and a 30% rise this year.
