Wall Street had been primed for a leap in bookings following the disclosure of a new $30bn-a-year contract Oracle signed in July, but had not expected such a big rise in its book of future business.<\/p>\n
The company, which was late to pivot its business into cloud computing services, has reaped the rewards of a groundswell in demand for data centre infrastructure from AI start-ups<\/a> and other major technology groups. Earlier this year it signed a deal to partner with OpenAI and SoftBank on the $500bn Stargate project<\/a>.<\/p>\n The after-hours surge in Oracle\u2019s share price added about $170bn to its stock market value and boosted the personal wealth of founder Larry Ellison by roughly $70bn, cementing his position as the world\u2019s second-richest person after Elon Musk. Oracle\u2019s stock price had already gained 43 per cent since the start of the year.<\/p>\n On a call with investors, Catz said Oracle had signed \u201csignificant cloud contracts with a who\u2019s who of AI, including OpenAI, xAI, Meta, Nvidia, AMD and many others\u201d.<\/p>\n Revenue from its infrastructure business would jump from $18bn this year to $144bn in five years\u2019 time, she predicted. The forecast is nearly 60 per cent higher than the $91bn that Wall Street had been expecting.<\/p>\n By comparison, revenue at Amazon Web Services, the biggest cloud company, topped $107bn in its last full year.<\/p>\n The jump in growth has left Wall Street analysts questioning how Oracle will be able to add computing capacity fast enough to handle the new demand, at a time when most cloud companies<\/a> have complained of chip shortages.<\/p>\n Rival cloud computing companies Amazon, Microsoft and Alphabet, along with Meta, are on course to spend more than $350bn between them this year on data centres and other AI infrastructure and more than $400bn in 2026. <\/p>\n On Tuesday, Oracle lifted its capital spending forecast for its fiscal year to the end of next May by $10bn, to $35bn. Catz claimed the company was able to generate higher revenues with less capital spending than rivals because it does not invest in buildings and uses its computing equipment more efficiently. \u201cI don\u2019t want to call it asset-light\u2009.\u2009.\u2009.\u2009but it\u2019s asset pretty light.\u201d<\/p>\n Oracle has burst on to the scene as a significant player in the cloud market thanks to the heavy computing demands of training new AI models for a handful of customers.<\/p>\n Recommended<\/p>\n
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