SAN FRANCISCO / LONDON (IT BOLTWISE) – Oracle announced ambitious growth targets for the coming years, but the company’s shares suffered a decline. Despite a strong outlook and an impressive revenue forecast of $225 billion by 2030, questions remain about the company’s investment plans.
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Oracle recently unveiled its long-term growth targets, which are based on average revenue growth of 31% per year. The company plans to achieve sales of $225 billion by fiscal year 2030. These ambitious goals were announced at an analyst meeting held as part of the AI World conference in Las Vegas. Despite this positive outlook, Oracle’s share price fell more than 8%.
Analysts like John DiFucci of Guggenheim emphasize the enormous opportunities that arise for Oracle as it expands its cloud infrastructure. In particular, the high margins of 30% to 40% on AI infrastructure contracts are highlighted as a significant advantage. DiFucci raised his price forecast for Oracle shares to $400, underscoring confidence in the company’s long-term prospects.
But some analysts are raising concerns about the capital spending needed to meet increasing demand for Oracle’s cloud services. Brent Thill of Jefferies points out that Oracle has not presented any concrete plans for future investments in its infrastructure. This raises questions about financing, especially as analysts forecast negative free cash flow of over $26 billion over the next three fiscal years.
Oracle recently signed a significant deal with OpenAI, which accounts for a large portion of the company’s revenue shortfall. However, co-CEO Clay Magouyrk emphasized that Oracle has a variety of customers and is not solely dependent on OpenAI. This diversification is seen as key to the company’s long-term stability and growth.
Analysts agree that Oracle will consolidate its recent gains in the coming quarters as investors gain confidence in management’s ability to deliver strong operating income despite a capacity-intensive business model. Oracle’s future depends largely on how successfully the company implements and finances its AI and cloud strategies.
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