Oracle's Cloud Business Set to Explode with OpenAI Deal and Growing Demand for AI Compute

Oracle's cloud business is expected to grow from $10 billion to $144 billion in five years, driven by increasing demand for AI compute. The company has signed a $300 billion contract with OpenAI and expects to exceed $500 billion in remaining performance obligations by the end of the current quarter. If successful, Oracle's cloud business could rival Alphabet's and significantly boost its earnings.

Oracle's cloud business has been on an unprecedented growth trajectory, with significant milestones achieved in recent quarters. The company's fiscal Q1 FY2026 earnings report, released on September 9, 2025, highlighted a massive 359% jump in remaining performance obligations (RPO) to $455 billion . This substantial increase is largely attributed to a landmark $300 billion cloud contract with OpenAI, spanning five years .

As of September 12, 2025, Oracle's cloud business is poised to grow from $10 billion to $144 billion in the next five years, driven by increasing demand for AI compute . The company expects to exceed $500 billion in RPO by the end of the current quarter, further cementing its position as a leading cloud provider . This ambitious target positions Oracle to rival Alphabet's cloud operations and significantly boost its earnings.

The recent leadership shakeup, where Safra Catz stepped down as CEO and was replaced by co-CEOs Clay Magouyrk and Mike Sicilia, underscores Oracle's commitment to its cloud business . This strategic move elevates the executives who run Oracle's cloud operations, aligning with the company's growth trajectory.

Despite the recent pullback in Oracle's stock, driven by a bearish analyst call from Redburn and broader market weakness, the longer-term outlook remains bullish . Oracle's stock is trading well above key moving averages, indicating a sustained uptrend . The company's strong earnings and cloud outlook, coupled with its strategic wins in AI and cloud infrastructure, position it for continued growth.

Oracle's upcoming AI Database launch, set to debut in October, is another significant development. This product will enable enterprise customers to run large-language models directly on Oracle's database platform, potentially driving further cloud consumption .

In conclusion, Oracle's cloud business is experiencing robust growth, driven by AI compute demand and strategic partnerships like the OpenAI contract. With a target to reach $144 billion in cloud revenue by 2030 and expectations to exceed $500 billion in RPO by the end of the current quarter, Oracle is well-positioned to rival Alphabet's cloud operations and significantly boost its earnings.