Oracle's Cloud Business Poised for 13% to 17% Annual Growth

Oracle's cloud computing business is on the verge of significant growth, according to a prominent investment firm. The firm's analyst reiterated a "buy" rating on Oracle's stock and raised the target price to 308 dollars, underscoring strong confidence in the company's long-term prospects.

Oracle Cloud Infrastructure (OCI) is set to become a major player in the global cloud market. The company is quickly becoming the preferred third-party cloud service provider for leading AI model enterprises and has a close partnership with AI chip giant NVIDIA. It was revealed that four out of the five largest AI language model developers globally are utilizing Oracle's data centers.

The analyst predicts that Oracle could achieve an average annual revenue growth rate of 13% to 17% over the next 5 to 10 years. While short-term investment expenditures may temporarily constrain the company's free cash flow in the coming years, a substantial increase is expected in the long term.

Another major U.S. bank's global research division also raised Oracle's target price to 295 dollars, although it maintained a "neutral" rating. The bank highlighted the robust demand for AI infrastructure, which is expected to continue benefiting Oracle's cloud services.

In June, Oracle disclosed in a regulatory filing that its CEO described the current fiscal year as having a strong start, with several major cloud service agreements signed. One of these contracts is projected to contribute over 300 billion dollars in annual revenue starting from the 2028 fiscal year, providing a strong foundation for the company's medium to long-term growth.