On Wednesday, Oracle’s stock jumped almost 40%, marking its best day since 1999. This surge came on the heels of optimistic predictions that the company could generate $5 trillion from its AI initiatives.
According to CEO Safra Catz, Oracle secured billion-dollar contracts with three different clients during the first quarter, as noted in a revenue report released Tuesday.
“We’ve established a significant cloud agreement with various firms, including Who, AI, OpenAI, and Meta,” Catz mentioned during an investor call following the report.
This influx of deals has led to a 359% increase in Oracle’s remaining performance obligations (RPO), translating to an additional $455 billion in future revenue from contracts.
Catz indicated that the company is aiming to sign another multi-billion dollar deal and anticipates RPO to surpass the $5 trillion mark.
The stock increase has boosted 81-year-old Larry Ellison, Oracle’s co-founder, bringing him closer to overtaking Elon Musk as the richest person in the world, with a net worth estimated at $384 billion.
Ellison holds about 1.16 billion shares of Oracle and could see profits around $90 billion if the stock maintains its value from Tuesday.
Oracle has accumulated wealth by securing a significant quantity of Nvidia AI chips and providing computing power to major tech players, such as Amazon and Google, through its cloud services.
The cloud revenue is projected to soar to $144 billion by fiscal 2030—an extraordinary leap from initial expectations of less than $20 billion for this fiscal year.
“We expect revenue from Oracle Cloud Infrastructure to grow from $18 billion this year to $32 billion, and then to $73 billion, $114 billion, and finally $144 billion over the next four years,” Catz stated.
Like many in the tech sector, Oracle has invested significantly in AI. However, the company has also reportedly laid off workers and discussed pay raises and bonuses as part of cost-saving measures this year.
Despite reporting revenue that slightly missed forecasts, Oracle’s stock response was robust. The first quarter revenue stood at $14.9 billion, just under the $15 billion anticipations, and adjusted earnings per share came in at $1.47, a bit shy of the $1.48 estimate.
The company projected that capital expenditures would reach around $35 billion in 2026, up from earlier estimates of about $25 billion annually.
In June, Oracle announced that it had started a new series of transactions set to commence in 2028, aiming for annual revenues exceeding $30 billion. Reports suggest that one of the key customers could be OpenAI.
Ellison’s company is also engaged in the Stargate project, a $500 billion AI infrastructure initiative introduced by President Trump at the White House in January, which involves both OpenAI and SoftBank.
Designed to improve the construction of AI data centers in the United States, Stargate’s plans have reportedly evolved rapidly due to challenges faced by partners in finalizing the deals, as noted by the Wall Street Journal in July.
