Oracle has bagged a landmark $30 billion cloud deal that signals a bold step into the arena of AI infrastructure. This agreement isn’t just about numbers—it marks a major pivot for the company as it aims to grow in a market that’s both fast-moving and fiercely competitive.
In recent months, Oracle’s stock has soared, helped by a string of significant cloud service contracts. One notable arrangement is expected to bring in over $30 billion in annual revenue from fiscal year 2028, with shares pushing past the $190 mark—a level many investors have watched closely. Given Oracle’s fiscal year 2025 revenue of $57.4 billion, this contract represents an important boost in a $330 billion cloud infrastructure services market projected for 2024.
Even with a modest 3% to 4% share of the cloud market in 2024/2025, this contract confirms that Oracle’s cloud strategy is on track, potentially narrowing the gap with giants like Amazon, Microsoft, and Alphabet. Announced as part of its fiscal Q1 2026 reports, the $30 billion deal is a key component of Project Stargate—a major initiative rolled out in January 2025, backed by a $500 billion investment over four years. Initially shrouded in secrecy, Oracle later revealed that OpenAI, known for its extensive computing needs, is behind this pivotal partnership.
Oracle’s momentum isn’t limited to this deal alone. The company’s total cloud revenue has climbed to $6.7 billion—a 27% increase year on year—with forecasts to ramp up the growth of its Cloud Infrastructure (IaaS) from 50% in FY25 to over 70% in FY26. Although the revenue impact won’t appear until FY28, market watchers are already re-evaluating Oracle’s position.
Despite a high price-to-earnings ratio (53.5) that carries an 82% premium over its tech peers, many see the deal as a strong signal of future growth. Oracle is also making strategic moves by partnering with xAI to bring the Grok-3 large language model to its platform and teaming up with IBM to integrate Watson X AI tools. With a planned $25 billion capital expenditure in fiscal year 2026, it’s clear that the company is serious about scaling its AI capabilities.
Analysts remain divided. Some, like Bernstein’s Mark Moerdler, have upgraded Oracle to a Buy, emphasising the company’s robust cloud growth and potential in AI training. Others, including Citi’s Tyler Radke, urge caution over valuation and profitability. If you’ve ever felt the pressure of keeping pace with tech’s rapid evolution, you can understand the mix of excitement and concern here.
At its core, Oracle isn’t just chasing numbers. It’s setting out to build more cloud infrastructure data centres than all its competitors combined, a target that, while ambitious, could redefine the competitive landscape. As Oracle scales its operations and fine-tunes its approach, the company could well emerge as a dependable, innovative force in the world of cloud and AI.