MW Oracle's stock rises as Wall Street's AI profitability concerns are put to rest

By Christine Ji

The tech giant raises its long-term financial targets and projects strong cloud margins, reassuring investors that its massive AI spending spree is on a path to profitability

Shares of Oracle have risen over 88% so far in 2025.

Oracle Corp. solidified its position as an artificial-intelligence leader at its AI World Conference, as the company raised guidance and shared positive business developments.

Investors were looking for confirmation of accelerating revenue and operating margins, and they received it Thursday. Oracle stated its new goal of achieving $225 billion of revenue and earnings per share of $21 by fiscal year 2030. The company also emphasized that it would be willing to accelerate investments in the short term if it saw an opportunity to do so.

Shares of Oracle $(ORCL)$ closed at $313 on Thursday, up over 88% year to date.

Co-Chief Executive Clay Magouyrk said that Oracle Cloud Infrastructure is on track for gross margins of 30% to 40%, a figure that pleasantly surprised and reassured Wall Street after a report from The Information suggested the company's cloud-computing margins could sink into the mid-teens due to heavy capital expenditures. In a note last week, Mizuho analyst Siti Panigrahi had estimated gross margins of 25%.

"As your business scales, your margin improves," Pat Walravens, head of technology equity research at Citizens, told MarketWatch prior to the meeting. With data-center demand outpacing supply, Walravens sees costs for Oracle's cloud-computing business going down as customers begin renting the space.

The company projected $166 billion in cloud-infrastructure revenue by fiscal 2030, growing revenue at a rate of 75% annually.

Additionally, Oracle announced seven new contracts across four different customers, including a cloud deal with Meta Platforms Inc. (META). The development shows that Oracle is reducing its customer concentration after partnering with OpenAI for a deal worth over $300 billion.

"None of those customers are OpenAI," Magouyrk said. "I know some people are questioning sometimes, 'Hey, is it just OpenAI?' The reality is, we think OpenAI is a great customer, but we have many customers."

Rob Oliver, senior research analyst at Baird, believes that Oracle's AI advantage comes from its ability to combine software with infrastructure, which the company emphasized on Thursday.

"Oracle has a massive juggernaut of a business in core areas that are absolutely critical to what is driving this investment in infrastructure, and that is data," Oliver told MarketWatch prior to the meeting. "You can't do GenAI without data."

Oracle has leaned heavily into its AI Database and AI Data Platform offerings and has started offering its database services on cloud providers other than its own. The company announced on Thursday that the multi-cloud database business has grown over 1,500% year over year. Larry Ellison, chief technology officer and chairman of Oracle, said that Oracle's database segment could be one of the company's fastest-growing businesses over the next five years.

Read: Oracle's stock surged on billions in new cloud contracts. Can it fund its AI promise?

-Christine Ji

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October 16, 2025 16:36 ET (20:36 GMT)

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