Annual revenue of 30 billion! Oracle secures a major cloud contract, with stock price surging over 8% to reach a historical high

As Wall Street analysts become more optimistic about Oracle's cloud business explosion, Oracle has announced the signing of multiple large cloud service agreements, one of which is expected to bring the company over $30 billion in revenue in a year. The stock price surged on Monday, reaching an all-time high.

Documents filed with the U.S. Securities and Exchange Commission (SEC) on Monday, June 30, Eastern Time, revealed that Oracle CEO Safra Catz stated in an internal company meeting that Oracle is "off to a strong start in fiscal year 2026, beginning June 1, 2025, with multi-cloud database revenue continuing to grow at over 100%."

According to the aforementioned documents, Catz disclosed in Monday's company meeting that Oracle "has signed multiple large cloud service agreements," and starting from fiscal year 2028, one significant new agreement is expected to "contribute over $30 billion in annual revenue" to Oracle, marking an important milestone in the company's cloud business development.

Catz emphasized that Oracle's multi-cloud database revenue continues to maintain a growth rate of over 100%, indicating strong market demand. However, the company stated that these newly signed agreements would not affect the performance guidance for fiscal year 2026.

The disclosure further confirms Oracle's competitive advantage in the cloud infrastructure market in the era of artificial intelligence (AI).

After the CEO confirmed the signing of large contracts, Oracle's stock price surged, rising over 7% in pre-market trading, and at the market's opening, it briefly rose over 8%, with early gains narrowing to within 5%, still likely to break the closing record set on June 24.

Stifel Analysts Turn Bullish, Target Price Raised by Nearly 40%

Alongside the announcement of large cloud business contracts, investment bank Stifel also upgraded Oracle's rating and target price in its latest report. Its analysts believe that sustainable cloud business growth and operational cost control will drive accelerated earnings per share growth for the company in fiscal year 2027 and beyond.

Stifel analyst Brad Reback raised Oracle's rating from Hold to Buy in a report released on Sunday night, significantly increasing the target price from $180 to $250, an increase of nearly 39%. The latest target price is nearly 19% higher than last Friday's closing price. This rating adjustment places Stifel among the analysts optimistic about Oracle's prospects.

In his research report, Reback stated that the significant increase in capital expenditures and the growth of cloud business backlog support Oracle's growth expectations. Although the rising costs of capital expenditures may put pressure on margins in the short term, Oracle's management has demonstrated its ability to control these costs. Reback's report stated:

"We believe that the combination of sustainable cloud growth and operational cost control will enable Oracle to overcome the adverse effects of revenue structure changes and achieve accelerated earnings per share growth in fiscal year 2027 and beyond."

Winners of Cloud Infrastructure in the AI Wave

Oracle has become the preferred third-party cloud service provider for leading artificial intelligence model companies and has established a strong partnership with AI chip manufacturing giant NVIDIA. According to Oracle executives, four out of the five major AI large language model manufacturers use the company's data centers.

After nearly 50 years of transitioning its database business to the cloud, Oracle's cloud infrastructure business has become a rapidly growing alternative to industry giants like Amazon, Microsoft, and Google's parent company Alphabet. The strong momentum in cloud business drove Oracle's stock price up 60% last year, marking its best performance since 1999.

Oracle's stock price has shown a V-shaped trend this year, dropping about 25% from the beginning of the year to mid-April's low point, followed by a strong rebound, with nearly a 20% cumulative increase by June, resulting in an overall increase of over 30% since the beginning of the year, reflecting the dual drivers of rapid growth in cloud business and surging demand for AI models.

Driven by a strong fourth-quarter earnings report, Oracle's stock price broke the record high set in December last year in June.

Wall Street Insights mentioned that Oracle's fourth-quarter report for fiscal year 2025, released over two weeks ago, delivered an unexpectedly strong performance, particularly in the SaaS cloud applications sector. Its core cloud applications (Fusion ERP and NetSuite) saw significant acceleration in growth, and management expects this momentum to continue into fiscal year 2026. The core catalyst for this accelerated growth is enterprises migrating from on-premises software to the cloud to leverage AI capabilities.

After the release of Oracle's financial report, Morgan Stanley's research report on June 12 pointed out that AI is becoming the core catalyst for ERP cloud migration. Research shows that 48% of respondents explicitly stated that leveraging AI capabilities is an important catalyst for upgrading ERP platforms to the cloud, second only to "digital transformation" (82%) and "improving operational efficiency/cost savings" (61%). Oracle's financial report serves as a strong testament to this.

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