Oracle’s $500 Billion Cloud Revenue Outlook Causes Stock to Surge

Oracle stock surged about 29% on September 10, 2025 after the tech giant forecasted that its cloud business could generate over $500 billion in the coming months. According to Reuters, the enterprise software firm could add $208 billion to its market capitalizations if the share price gains hold. This year alone, Oracle stock has gained 45% as investors bet big on AI-driven cloud companies.

Highly Optimistic Revenue Outlook

While releasing its Oracle’s quarterly earnings on September 9, 2025, the company said it expects its annual cloud revenue to reach $144 billion by 2030. Oracle’s cloud revenue forecast represents a huge leap from its less than $20 billion estimate in the current financial year.

“We expect Oracle Cloud Infrastructure revenue to grow 77% to $18 billion this fiscal year — and then increase to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years,” Oracle CEO Safra Catz said in a statement.

While giving the optimistic revenue outlook, the software firm raised Oracle’s remaining performance obligation (RPO) based on existing customer agreements. RPO represents the total value of contract revenue the company currently holds. The company reported signing “four multibillion-dollar contracts with three different customers” in the first quarter. “We have signed significant cloud contracts with the who’s who of AI, including OpenAI, xAI, Meta, and many others,” Catz said during a call with investors.

According to CEO Catz, the contracts pushed Oracle’s backlog to $455 billion in the first quarter. The software firm expects to onboard several other multibillion-dollar clients, a move that will push its RPO past the half a trillion dollar mark. Oracle’s growing list of contracts points to rising demand for its relatively low-cost cloud infrastructure services.

Oracle’s Q1 Performance

Oracle stock rallied even after its first quarter earnings fell below investor expectations. The company’s quarterly revenue stood at $14.9 billion against analyst estimates of $15 billion. Oracle’s adjusted earnings per share of $1.47 was also below the projected $1.48. The enterprise software firm has been securing huge amounts of NVIDIA AI chips and leasing out computing power through its cloud infrastructure business as it seeks to stay ahead of peers like Google and Amazon.

During the earnings call, the company said its capital spending will increase to about $35 billion in 2026, up from the estimated $25 billion. Oracle’s Q1 earnings report captured investor attention when the firm announced a contract with a customer will bring in over $30 billion in yearly revenue beginning 2028. However, the software giant did not reveal details of the customer in the deal.

Although investors were hoping to hear more about Oracle’s role in the Stargate AI project, the company did not provide an update. In January 2025, Oracle shares surged as U.S. President Donald Trump announced the $500 billion data center investment. Oracle has teamed up with SoftBank and OpenAI in the joint venture.

Chip Makers’ Stock Rally

Oracle’s quarterly earnings had a positive effect on the stock performance of some leading U.S. chip manufacturers. NVIDIA stock rose 1.96% while AMD’s gained 3.2%. Broadcom stock also rose by 2.28%, just days after it soared nearly 9% following a $10 billion AI chip order from OpenAI. In this deal, OpenAI will partner with Broadcom to produce its own AI chips. The first batch of the chips is expected to start shipping in 2026.

The software company has already signed contracts with Alphabet, Amazon, and Microsoft to operate within their clouds. Oracle reported that revenue from these three firms increased by 1,529% in the quarter under review. Oracle’s involvement in the Stargate project is quite strategic and would also be beneficial in the long-run. “Oracle’s relationship with esteemed artificial intelligence firms, such as OpenAI, as well as its participation in Stargate, puts it center stage for AI training and inference workloads,” Morningstar analysts said.