Oracle Forecasts Strong AI-Driven Revenue Growth for 2025

Oracle

Oracle (NASDAQ:ORCL) on Tuesday projected double-digit revenue growth for fiscal 2025, driven by strong demand for its AI-powered cloud services. This optimistic forecast sent the company’s shares up 8% in after-hours trading.

The company also announced a partnership with OpenAI, the maker of ChatGPT, and Google Cloud to expand its cloud infrastructure offerings. Oracle CEO Safra Catz stated, “I expect that each successive quarter should grow faster than the previous quarter as Oracle Cloud Infrastructure capacity begins to catch up with demand.”

In Q4, Oracle secured over 30 AI sales contracts totaling more than $12.5 billion, including one with OpenAI to train ChatGPT using Oracle Cloud. These investments are crucial for Oracle as it aims to compete with cloud giants like Microsoft (NASDAQ:MSFT), which has seen rapid growth in its Azure cloud services through its partnership with OpenAI.

Oracle has invested billions in hardware from Nvidia (NASDAQ:NVDA) and is set to receive Nvidia’s new flagship B200 chip.

For the fourth quarter, Oracle reported remaining performance obligations—a key measure of booked revenue—at $98 billion, up 44% year-over-year. Catz highlighted that the company signed its largest sales contracts in Q3 and Q4, driven by significant demand for training AI large language models in Oracle Cloud.

Oracle’s cloud revenue reached $5.3 billion, a 20% increase from the previous year. However, its total revenue for the quarter was $14.29 billion, falling short of analysts’ average estimate of $14.55 billion, according to LSEG data. The company reported adjusted earnings of $1.63 per share, compared to estimates of $1.65 per share.

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