Oracle Targets $225B Revenue by 2030 as AI Cloud Build-Out Accelerates

Key Points

• Oracle targets more than $225 billion in fiscal 2030 revenue, implying a 35% compound annual growth rate from fiscal 2026. It expects to become free-cash-flow positive in the second half of fiscal 2028 and generate over $30 billion in free cash flow in fiscal 2029.
• The company plans to add roughly 7 gigawatts of AI data-center capacity, reaching about 10 gigawatts by fiscal 2028. Capital spending is expected to peak in fiscal 2027–2028, while vendor financing and customer contributions are intended to limit additional funding needs to $20 billion.
• Oracle is expanding AI monetization across its cloud and applications businesses through agentic tools, usage-based “AI units” and infrastructure services. Management highlighted rapidly growing Fusion AI usage, more than 1,000 AI infrastructure customers and significant opportunities to migrate and cross-sell enterprise applications.

Oracle NYSE: ORCL outlined a strategy to expand its AI infrastructure, cloud applications and data businesses at its investor day, while providing financial targets through fiscal 2030 and detailing plans to limit additional external funding needs for its current investment cycle.

Chief Financial Officer Hilary Maxson said Oracle expects revenue to exceed $225 billion in fiscal 2030, representing a 35% compound annual growth rate from fiscal 2026 and more than $158 billion of incremental revenue over four years. The company also expects to become free-cash-flow positive during the second half of fiscal 2028 and to generate more than $30 billion in free cash flow in fiscal 2029.

Maxson said Oracle expects to require an additional $20 billion of capital to complete the current investment cycle, split evenly between debt and equity. She described that amount as the final incremental funding needed for the cycle, citing vendor financing, customer-provided hardware and customer prepayments as mechanisms that reduce upfront capital requirements.

Infrastructure Build-Out and Financial Framework

Oracle said it expects to add roughly 7 gigawatts of capacity over the next couple of years, bringing its portfolio to approximately 10 gigawatts by the end of fiscal 2028. Maxson said capital expenditures are expected to peak in fiscal 2027 and fiscal 2028 before declining in fiscal 2029, even as the business continues to grow.

For modeling purposes, Oracle presented a representative 1-gigawatt project that assumes the company leases the data-center shell and power infrastructure. The example included approximately $37 billion in capital expenditures, annualized revenue of about $16 billion once fully ramped, gross margin of about 35% and project-level operating margin of about 34%.

Maxson said vendor financing could reduce Oracle’s initial capital requirement for such a project by about 50%, while a bring-your-own-hardware arrangement could reduce required capital further. She said the company expects to maintain investment-grade credit ratings and target a net-debt-to-EBITDA ratio below 3.5 times by fiscal 2029.

Oracle expects its non-GAAP operating margin to return above 40% in fiscal 2030, after pressure from the mix of infrastructure growth and project ramp-ups. The company also forecast non-GAAP earnings per share of more than $21 in fiscal 2030.

AI Infrastructure Capacity and Flexibility

Mahesh Thiagarajan, president of Oracle Cloud Infrastructure, said OCI is focused on faster access to computing capacity and optimized total cost of ownership for AI customers. He highlighted Oracle’s work on power generation, modular data-center construction, supply-chain expansion and liquid-cooling designs.

Thiagarajan said Oracle delivered about 850 megawatts of capacity during the first quarter of fiscal 2027 across 38 projects in 11 countries, equivalent to roughly 8.5 megawatts per day and four times the prior-year pace. He said OpenAI had accepted capacity at Oracle’s Abilene, Texas, data center in less than 24 hours and that availability there had exceeded 99%.

He also emphasized OCI’s ability to reallocate capacity among customers and use infrastructure across different workloads. Oracle said it can divide a 512-GPU cluster across as many as 32 customers and can reassign capacity between customers in hours. Thiagarajan said OCI has more than 1,000 AI infrastructure customers.

In addition to GPU capacity, Thiagarajan said a recent customer commitment covered about 1 million CPUs, with 99% involving hardware generations introduced between 2017 and 2021. He said AI infrastructure customers use more than 40 additional OCI cloud services on average, while roughly 13% of their spending is on non-accelerator services.

Applications Shift Toward Usage-Based AI Revenue

Co-CEO Mike Sicilia said Oracle views AI as a catalyst that increases the value of its infrastructure, database and applications portfolio. He said AI tools designed to automate cloud migrations could reduce the time, expense and complexity of moving customers from on-premises systems to cloud platforms.

Sicilia said customers used embedded Fusion AI capabilities more than 150 million times during the first quarter of the current fiscal year, with usage rising 42% from June to August. Fusion AI consumed nearly 500 billion tokens in September, up 22.7% from August, he said. The number of live agents in Fusion Applications grew from more than 1,000 in May to 3,500 in September.

Chris Leone, executive vice president of applications development, introduced Fusion Claw, a technology intended to perform longer-running and computationally intensive enterprise work, including reconciliations, simulations and optimizations. Leone said Oracle separates AI reasoning and planning from deterministic computing used to execute workloads, which he said improves precision and economics when handling large transactional datasets.

Oracle said it is delivering 75 agentic applications, including 25 enabled by Fusion Claw. Leone also introduced Fusion Companion, an AI interface designed to work across Fusion Applications, and a machine-readable configuration registry that Oracle said could reduce the mechanical work of implementing and configuring Fusion by 50% to 70%.

Leone said Oracle is extending its subscription model with usage-based “AI units,” allowing the company to generate additional revenue as AI performs more work without necessarily adding application seats. He said the architecture behind the offering is intended to support favorable margins.

Industry Applications and Customer Examples

Simon de Montfort Walker, executive vice president of industry applications, said Oracle sees four main application growth vectors: migrations from on-premises products to cloud, cross-selling additional applications, new agentic applications and outcome-based services such as embedded finance.

Walker said moving a customer from an on-premises application to cloud typically produces a three- to four-times increase in revenue, while adding a second application can generate another roughly three-times increase. He said 60% of Oracle’s North American financial-services customers have only one Oracle application, representing a cross-sell opportunity of more than $5 billion across Oracle’s industries in North America.

During a customer panel, Grupo Bimbo Vice President of Global Business Technology Antonio Parra said the company uses Oracle Fusion to unify operations following acquisitions and to consolidate financial and supply-chain data. He said the company reduced financial closing time from 16 days to three days and sees supply-chain improvements as a potentially larger source of savings.

Vodafone Head of Oracle Cloud Services Sanjay Apte said the telecommunications company has deployed six Oracle Dedicated Region cloud regions across three countries and is using Oracle Database@Azure and Oracle Database@AWS as it consolidates data centers and moves applications to public cloud environments.

About Oracle (NYSE:ORCL)

Oracle Corporation NYSE: ORCL is a global technology company that develops enterprise software, cloud infrastructure and database technologies. Its products help organizations store, manage, analyze and secure data, while supporting business operations across industries and geographies.

The company's offerings include Oracle Database, Java, Oracle Cloud Infrastructure and a broad portfolio of cloud-based applications. These applications serve functions such as enterprise resource planning, financial management, human resources, supply-chain management, customer experience and industry-specific operations.

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