The future looks promising for Oracle Corporation (ORCL), a leader in cloud computing. Over the past three years, Oracle’s stock has soared, transforming an initial $1,000 investment into nearly $4,600. This impressive 358% increase has notably outperformed the S&P 500, which rose by 84% during the same period. As of now, Oracle’s market capitalization stands at approximately $802 billion, making it the 14th-largest company globally.
Oracle’s Projected Growth: What Lies Ahead?
Investors are keenly interested in Oracle’s trajectory over the next three years. The company wrapped up fiscal 2025 on May 31, reporting revenue of $57.4 billion. This figure represents an 8% growth from the previous year, showcasing Oracle’s steady advancement. In fiscal year 2022, Oracle generated $42.4 billion, indicating a compound annual growth rate (CAGR) of 10.6% over the past three years.
- Cumulative revenue for fiscal years 2023-2025 exceeded $160 billion.
- Annual revenue for fiscal 2026 is projected to be $67 billion.
Driving Factors Behind Growth
Oracle’s anticipated growth stems from several factors. The company reported a remarkable $455 billion in remaining performance obligations (RPO) at the end of fiscal Q1, a staggering 359% increase year-over-year. This backlog is nearly three times the total revenue Oracle generated in the last three fiscal years combined.
The increasing demand for Oracle’s cloud infrastructure, especially for artificial intelligence (AI) applications, has fueled this surge. The company operates in 51 regions across 26 countries, offering over 150 cloud-based services. Additionally, its multicloud strategy enables clients to run applications on established platforms such as Microsoft Azure, Amazon AWS, and Google Cloud.
Infrastructure Expansion Plans
Oracle is accelerating its infrastructure development significantly. The plan includes:
- Increasing the number of multicloud data centers from 34 to 71.
- Dedicating nearly 60 data centers by the end of the year, doubling their current count.
According to Chairman Larry Ellison, Oracle aims to build more data centers than all competitors combined. This expansion is crucial for converting its substantial revenue backlog into actual revenues, further supporting potential stock price gains.
Long-Term Projections
Expectations for Oracle’s revenue growth remain high. Projections indicate that by fiscal year 2028, revenue could approach $120 billion. If Oracle maintains its sales multiple in line with the average of the U.S. technology sector, its market cap could rise to $1.08 trillion, signifying a potential 34% increase from current levels.
With increasing investor confidence and strategic expansion, Oracle is well-positioned for continued growth. As the company evolves, many are watching closely to see how these strategies unfold and impact the technology market at large.
