Led by new commitments with OpenAI for 4.5 GW worth of data centre capacity, and deals with TikTok and Nvidia, powered Oracle’s new bookings to $455 billion at the end of its first quarter of the new fiscal year. That is a 4x jump from the same period last year.
CEO Safra Catz said in a statement that these recent deals will rapidly translate into Oracle’s cloud infrastructure business, which will grow 77% this financial year to $18 billion and another 8x in the next five years to reach $144 billion by the fiscal year which will end in May 2030. The outlook was ahead of Wall Street expectations and sent shares soaring afterhours.
Known for providing database software Oracle Corp. has recently found success in the competitive cloud computing market. It signed four multi-billion dollar contracts with three different customers and is expected to sign several others in the coming months, CEO Catz said, taking Oracle’s remaining performance obligations past $500 billion.
However, Wall Street is concerned over the long-term profitability of the cloud infra business, with analysts expecting Oracle’s free cash flow to remain negative for the second year running, due to the high costs in building these data centres. Capex this year is projected to be $35 billion, well above the $26 billion estimates.
In case these 27% gains hold out in regular trading on Wednesday, it will mark the biggest single-day gain for the company since 1999 and add close to $190 billion to Oracle’s market capitalisation. The stock surged to a record high afterhours.
