Cloud business growth prospects are optimistic. Oracle Corporation (ORCL.US) raised its revenue forecast for fiscal year 2029 to $104 billion.

Oracle Corporation (ORCL.US) announced that the annual revenue for its fiscal year 2029 is expected to increase to at least $104 billion. This is seen as a positive signal for the growth prospects of the software manufacturer's cloud infrastructure business. Doug Kehring, Executive Vice President of Oracle Corporation, made this prediction during the company's annual financial analyst briefing on Thursday. Oracle Corporation also raised its revenue outlook for the fiscal year 2026 from the previous estimate of $65 billion to at least $66 billion, higher than the analysts' average expectation of $64.5 billion. Earlier this week, Oracle Corporation's first-quarter performance for the fiscal year 2025 exceeded market expectations, with quarterly profits and bookings indicating that demand for artificial intelligence continues to drive its cloud computing business. The financial report showed that Oracle Corporation's Q1 revenue increased by 7% year-on-year to $13.3 billion, in line with analysts' average expectations. Operating profit on a non-GAAP basis increased by 14% year-on-year to $5.7 billion, surpassing analysts' average expectation of $5.59 billion; earnings per share were $1.39, higher than analysts' average expectation of $1.33. Cloud revenue (IaaS+SaaS) in Q1 increased by 21% year-on-year to $5.6 billion, matching analysts' expectations; of which, cloud infrastructure revenue increased by 45% year-on-year to $2.2 billion, exceeding analysts' average expectation of $2.18 billion. Remaining performance obligations (RPO) increased by 53% year-on-year to $99 billion, setting a new record for the company. Capital expenditures were $2.3 billion, lower than analysts' average expectation of $3.04 billion. Known for its database software, Oracle Corporation is currently focused on expanding its cloud infrastructure business, which involves leasing computational power and storage, to compete with companies like Amazon.com, Inc. (AMZN.US), Microsoft Corporation (MSFT.US), and Alphabet (GOOGL.US). Oracle Corporation's cloud services have been successful in generating AI workloads, gaining reputation, and its customers include companies like Reka and xAI, an AI startup owned by Elon Musk. Furthermore, Oracle Corporation has reached agreements with larger cloud infrastructure competitors, allowing its namesake database software to run more easily on their platforms. Doug Kehring stated during Thursday's event that most database customers have not yet moved to the cloud. Oracle Corporation has indicated that transitioning on-premises database customers to the cloud will be a key driver of revenue growth. The optimistic outlook for cloud business growth has prompted many Wall Street analysts to raise their ratings for Oracle Corporation. JMP, a renowned investment firm on Wall Street, upgraded Oracle Corporation's stock rating to "outperform the market" and set a target price of $175. Morgan Stanley maintained a "hold" rating for Oracle Corporation but increased the target price from $125 to $145. Evercore reaffirmed its "outperform the market" rating for Oracle Corporation and raised its price target from $160 to $175. Bank of America Corp raised Oracle Corporation's target price from $155 to $175, citing accelerated revenue and earnings growth, while maintaining a "neutral" rating for Oracle Corporation.