Oracle (ORCL) Stock: Meta Deal Confirmed as Company Books $65 Billion in Cloud Contracts

TLDR

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Oracle CEO Clay Magouyrk announced $65 billion in new cloud infrastructure commitments secured within 30 days during the current quarter across seven contracts from four customers
Meta confirmed as one of four major customers, reportedly working on a deal previously estimated at $20 billion by Bloomberg
Oracle projects $20 billion in AI-powered database and AI data platform revenue by fiscal 2030, up from $2.4 billion in fiscal 2025
The company targets $225 billion in revenue and $21 adjusted earnings per share for fiscal 2030, representing 31% compound annual growth
Jefferies raised its price target on Oracle to $400 from $360, citing accelerating momentum in AI and cloud infrastructure businesses

Oracle shares jumped 3% on Thursday after the company confirmed a cloud computing deal with Meta and revealed it secured $65 billion in new cloud infrastructure commitments in just 30 days.

Oracle Corporation, ORCL

CEO Clay Magouyrk made the announcements at Oracle’s AI World conference in Las Vegas. The commitments came from seven contracts across four different customers during the current quarter.

Meta, the parent company of Facebook and Instagram, was confirmed as one of the four major customers. Bloomberg previously reported in September that the two companies were discussing a deal worth around $20 billion.

“None of those customers are OpenAI,” Magouyrk told analysts. “I know some people are questioning sometimes, ‘Hey, is it just OpenAI?’ The reality is, we think OpenAI is a great customer, but we have many customers.”

The deal comes as Meta ramps up spending on AI infrastructure. The social media giant said in July it expects capital expenditures between $66 billion and $72 billion this year.

Revenue Projections Show Major Growth

Oracle laid out ambitious targets for fiscal 2030. The company expects total revenue to reach $225 billion, representing a 31% compound annual growth rate.

Adjusted earnings per share are projected to hit $21 by fiscal 2030. Analysts polled by LSEG had been expecting $18.92 per share on $198.39 billion in revenue.

The AI-powered database and AI data platform business is expected to generate $20 billion in revenue by fiscal 2030. That’s up from $2.4 billion in fiscal 2025 and $3 billion in fiscal 2026.

Oracle Cloud Infrastructure revenue is forecast to surge at a 75% compound annual growth rate to $166 billion by fiscal 2030. The company has been expanding its cloud division to compete with Amazon and Google.

“You see the change in these numbers that it’s a little bit easier for us to find supply, not this year or next year, but in subsequent years,” Magouyrk said. “So as we’re able to find that supply, customers contract for it, we see immense demand, and then we go about delivering that to customers.”

Analyst Upgrades Follow Conference

Jefferies raised its price target on Oracle to $400 from $360 following the AI World conference and Financial Analyst Day presentations. The firm maintained its “Buy” rating.

The brokerage said Oracle is entering “a new growth phase” as it benefits from the AI infrastructure supply-demand imbalance. Jefferies expects Oracle’s valuation to reflect “a rare acceleration story in software.”

Doug Kehring, Oracle’s principal financial officer, addressed concerns about profitability. “I’ve read a lot of stories that are speculating that Oracle is chasing revenue for revenue’s sake, but let’s be crystal clear,” he said.

“We only pursue opportunities where we have a clear line of sight to attractive market margins that reward us for intellectual property and the activity we bring to customers.” AI infrastructure has an adjusted gross margin of 30% to 40% after land, data center, power and computing equipment costs, according to Oracle.

The Information reported earlier this month that Oracle saw a 14% gross margin on renting out Nvidia AI chips in the August quarter. Oracle has been offering its database in clouds other than its own in recent years.

The company secured a commitment from OpenAI in excess of $300 billion back in July. Jefferies noted Oracle’s “One-Oracle” strategy integrates database, applications, infrastructure, and AI.

After the market close, Oracle stock slipped 2% in extended trading despite beating analyst expectations with its 2030 targets.

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