Oracle Corporation announced a projection of more than 50% year-over-year revenue growth in cloud services due to explosive demand for artificial intelligence infrastructure. Oracle shares rose more than 13%, bringing the company closer to historic highs.
Oracle Cloud Infrastructure: Growth Engine with 52% Expansion
The main driver is Oracle Cloud Infrastructure (OCI) with 52% growth in the last quarter. CEO Larry Ellison expects 50-70% OCI growth for the following fiscal year. This acceleration reflects global explosive demand for artificial intelligence infrastructure for training generative models.
Oracle provides high-performance GPU clusters with Nvidia and AMD chips, which are essential for training large language models. Customers include Elon Musk’s xAI, Mistral AI, Cohere, OpenAI, and Meta Platforms.
“We expect to roughly double the amount of cloud capacity annually for the next few years,” stated Ellison.
Record Contract Backlog Reached $130 Billion
Remaining Performance Obligations (RPO) – contractually secured revenue – reached $130 billion, representing a 63% year-over-year increase. This backlog includes:
- Multi-billion-dollar contracts with Google Cloud, Microsoft Azure, and Meta Platforms
- Long-term government contracts for cloud services
- Multi-cloud strategy across more than 40 data centers
- Integrated artificial intelligence solutions for enterprise customers
Technological Innovation: Autonomous Database and AI Platform
Oracle invests in Oracle AI Data Platform with comprehensive tools for developing, training, and deploying AI models. The key differentiator is Autonomous Database, which automates optimization and scaling.
Product performance:
- Autonomous Database – 42% growth in the last quarter
- Multi-cloud database services – 92% increase
- Cloud applications (SaaS) including ERP and HCM – 8-10% growth
- Overall gross margin at 71%
Capital Investments: Risk or Necessity?
Oracle dramatically increased capital expenditures from historic $7 billion annually to planned $16-25 billion to cover infrastructure demand.
Rebecca Wettemann, CEO of Valoir: “The question remains whether cloud infrastructure providers are over-investing in artificial intelligence workloads that won’t materialize.”
Oracle argues that demand exceeds available capacity and the company cannot immediately fulfill all orders.
Global Expansion and Strategic Partnerships
Oracle operates more than 65 cloud regions worldwide and actively expands into Europe, India, the Middle East, and Latin America.
Strategic partnerships include Microsoft Azure Interconnect for multi-cloud solutions, Nvidia for artificial intelligence training clusters, and Palantir for advanced analytics. Unique multi-cloud capabilities reduce dependence on single vendors.
Financial Performance Exceeds Expectations
Total Q4 revenue rose 4% to $14.3 billion. Analysts estimate Oracle could exceed $70 billion in total revenue, with more than half coming from cloud services.
Financial health demonstrates positive free cash flow of $6 billion quarterly, 25% increase in quarterly dividend, and non-GAAP operating margin around 44%.
Challenges and Opportunities in the AI Economy
Oracle transformed from a traditional database vendor into a leading force in artificial intelligence infrastructure. Through growing demand for computing capacity, record OCI growth, and strategic alliances, it established itself as a key facilitator of the artificial intelligence economy.
Challenges remain: high capital intensity, growing competition from AWS, Azure, and Google Cloud, and risk of correction in the speculative cycle around artificial intelligence. However, Oracle enters the second half of the year with one of the strongest growth outlooks in the technology sector and a product ecosystem that resonates with the most demanding clients in the market.
