Oracle's Stock Surges on $30 Billion Cloud Services Deal

Oracle's stock surged 5% to an all-time high after a regulatory filing revealed a cloud services agreement projected to bring in over $30 billion annually starting in fiscal year 2028. The deal, which will be highlighted by CEO Safra Catz, reinforces Oracle's long-term growth trajectory and strengthens its position in the cloud services market. The company has gained 33% year-to-date, driven by demand for cloud infrastructure and artificial intelligence technologies.

Oracle's stock surged 5% to an all-time high following a regulatory filing that revealed a significant cloud services agreement. The deal, projected to bring in over $30 billion annually starting in fiscal year 2028, was announced by Oracle CEO Safra Catz. This agreement underscores Oracle's long-term growth trajectory and strengthens its position in the cloud services market.

The deal, which will be highlighted by Catz at a company meeting, is expected to start contributing to Oracle's revenues in the 2028 fiscal year. This latest development comes on the heels of Oracle's strong performance in fiscal year 2026, with cloud growth and the rise of artificial intelligence models driving the company's success. According to the filing, Oracle's MultiCloud database revenue continues to grow at over 100%, and the company has signed multiple large cloud services agreements, including the one expected to contribute over $30 billion annually.

The deal will not affect Oracle's 2026 guidance, according to the filing. Oracle's shares have appreciated 33% year-to-date, outperforming both the Zacks Computer and Technology sector's return of 5.5% and the Zacks Computer-Software industry's appreciation of 14.6%. This strong performance is driven by demand for cloud infrastructure and artificial intelligence technologies.

Oracle's collaboration with xAI to deploy its Grok models via the Oracle Cloud Infrastructure (OCI) is expected to further drive momentum in the company's cloud services and license support revenues in the near term. The company's 23 AI database has helped businesses integrate AI solutions by automating workflows and providing flexibility to tailor models to business-specific needs. This partnership is likely to increase OCI compute, storage, and network usage and encourage long-term contract renewals.

Oracle faces tough competition from players like Alphabet (GOOGL) and Amazon (AMZN). Alphabet's Google Cloud invests heavily in custom AI chips called TPUs and recently introduced its latest version, Ironwood. Amazon's cloud services are deployed via AWS, with AI applications like Alexa+ and its latest AI chip, Trainium 2, delivering massive improvements in performance and efficiency. Despite this competition, Oracle's stock has outperformed Alphabet and Amazon in the year-to-date period.

Oracle trades at a three-year EV/EBITDA of 26.53X, substantially above the Zacks Computer-Software industry average of 19.86X. The Zacks Consensus Estimate for Oracle's fiscal 2026 revenues is currently pegged at $66.63 billion, indicating 16.08% year-over-year growth. The consensus mark for 2026 earnings is pegged at $6.71 per share, up 1.05% over the past 30 days.

The latest developments highlight Oracle's commitment to leveraging AI and cloud technologies to drive growth and maintain its competitive edge in the market.

References:
[1] https://www.cnbc.com/2025/06/30/oracle-orcl-stock-cloud-deal.html
[2] https://finance.yahoo.com/news/oracle-benefits-ai-cloud-adoption-154400955.html