While raising the guidance for the 2026 fiscal year, Oracle expects revenue to reach at least $104 billion in the 2029 fiscal year, a nearly 58% increase over three years. Oracle announced on Monday that revenue for the first quarter of the 2025 fiscal year increased by 7%, and the cloud infrastructure business OCI, which has attracted attention, exceeded expectations with a revenue growth of 45%. After the financial report, Oracle's stock price continued to hit a new all-time high.
Software companies benefiting from the AI application boom. $Oracle (ORCL.US)$ Released a more optimistic revenue outlook.
After the US stock market closed on Thursday, September 12, Oracle's Executive Vice President Doug Kehring revealed at the company's financial analyst meeting this year that the company expects revenue for the fiscal year 2026 to reach at least $66 billion. This is an increase of $6.5 billion from the company's previous guidance, and the new guidance further exceeds the current average analyst forecast of $64.5 billion.
Oracle's executives also expect that in three years, the company's annual income will exceed the $100 billion mark. For the fiscal year 2029, the company's revenue will be at least $104 billion, indicating a nearly 58% growth in income over three years. It is expected that the earnings per share (EPS) will increase by 20% at that time.
After the above expectations were announced, Oracle's stock price rose by about 2.7% on Thursday, with post-market trading accelerating the rise, with post-market gains reaching over 7%. If this upward trend continues on Friday, Oracle will reach a new record high for the fourth consecutive day.
Analysts believe that the upward adjustment of next year's revenue guidance is an optimistic signal for Oracle's cloud infrastructure business OCI growth prospects. Known for its database software, Oracle is currently focused on expanding in the OCI field. Oracle competes with Amazon, Microsoft, and Google parent company Alphabet by renting computing power and storage.
Oracle's cloud has been successful in the field of generative AI workloads. The company previously stated that its clients include two AI startups, Reka and xAI from Musk. Oracle has also reached agreements with larger cloud infrastructure competitors to make Oracle's database software run more easily on their cloud platforms.
Oracle stated that migrating local database customers to the cloud will be the main pillar of the company's revenue growth. Kehring stated at a meeting this Thursday that most of Oracle's database customers have not yet moved to the cloud.
Earlier this week, Oracle announced stronger quarterly performance than Wall Street expected. Oracle highlighted during the earnings call that the most significant news of the quarter was signing a multi-cloud agreement with Amazon Web Services (AWS), where Oracle's latest Exadata hardware and database software 23ai version will be embedded in AWS cloud data centers. When it goes live in December, AWS customers will have easy access to Oracle databases.
Oracle announced post-market on Monday that for the first quarter of its fiscal year 2025 ending in August, revenue exceeded expectations with a 7% year-on-year increase to $13.3 billion, including the highly anticipated OCI revenue surpassing expectations with a sharp 45% year-on-year growth to $2.2 billion. Oracle provided guidance indicating that growth will accelerate this quarter. Revenue guidance for the second quarter ranges from 8% to 10%, with the midpoint exceeding analysts' expected growth rate of 8.72%.
After the financial report was released, Oracle's stock price continued to rise and hit a record high at the close. Among the AI concept stocks, the stock price has risen by 54% since the beginning of this year, second only to Nvidia in terms of year-to-date growth.
Morgan Stanley analyst Keith Weiss later emphasized that so far this year, Oracle's stock performance has far exceeded that of its peers in the software industry. He attributes this strong performance to Oracle being seen by investors as a major beneficiary of artificial intelligence (AI) hardware scarcity, driving the development of its OCI business.
Wall Street refers to the belief that OCI is key to Oracle's transformation from a traditional database company to an enterprise cloud computing service provider. The strategic partnership is widely recognized on Wall Street as a catalyst for Oracle's AI performance. In addition to a 'major collaboration' with the 'silicon valley's most mysterious' big data company Palantir, Oracle has been providing accelerated computing instances and software services to enterprises through OCI for years, and the collaboration to provide AI solutions has expanded this year.
Editor/Somer