Oracle Expects Cloud Sales to Hit $166 Billion by 2030

Oracle has announced that it expects its cloud infrastructure revenue to grow to $166 billion by 2030. This would make up nearly 75% of the company’s total sales at that time. CEO Clay Magouyrk shared this forecast during a meeting with financial analysts, stating that new business is coming from many customers, not just OpenAI.

“Our forecast for $225 billion in overall revenue and $21 in adjusted earnings per share by 2030 outpaces current analyst expectations,” said Dough Kehring, Oracle CFO.

Oracle’s cloud revenue has grown rapidly, increasing by 28% in the most recent quarter to $7.2 billion. “We booked $65 billion in new commitments in a recent 30-day period, including a massive contract with Meta Platforms,” said Clay Magouyrk. Magouyrk also stated that Oracle’s cloud customer base is broad, with these new bookings made by multiple companies apart from OpenAI.

Profit margins are a key focus for investors. Oracle projected adjusted gross margins of 30% to 40% for the AI cloud infrastructure piece of its business, which is lower than traditional cloud software and services due to the high capital costs involved in building and running AI data centers.

Nevertheless, these margins are expected to remain consistent for the length of the contracts. Other cloud segments, which include more conventional software and infrastructure, are expected to enjoy higher margins of between 65% and 80%.