Oracle Corporation (ORCL) is widely recognized for its software and hardware products, but its cloud business has emerged as its most powerful growth engine, setting the stage for significant expansion over the next three years.
ORCL shares got a boost to start the week after regulatory filings disclosed a massive cloud deal expected to add more than $30 billion to the company’s revenue beginning in 2028.
The filing also offered insights into one of Oracle’s cloud segments, branded MultiCloud. Notably, it’s growing at over 100% year-over-year, even before factoring in the new $30 billion deal.
Beyond this headline deal, Oracle has been steadily signing major enterprise clients, particularly those pursuing hybrid cloud strategies.
While Oracle’s position in the cloud market is no secret — it consistently ranks among the world’s top five cloud providers — its market share still trails well behind leaders like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
As of the end of 2024, Oracle’s share of the global cloud market was just 3%, according to Synergy Research Group data.
Oracle’s cloud segment and overall business continue to expand
Oracle is coming off a strong fiscal fourth quarter, reporting $15.9 billion in total revenue, with $6.7 billion generated from its cloud business. Total revenue rose 11% year-over-year, while cloud revenue grew an impressive 27%.
The company’s cloud infrastructure, cloud applications, and Fusion Cloud ERP segments each posted growth ranging from 12% to 52%, fueling a solid fiscal year overall. For the full year, Oracle’s total revenue climbed 8% to $57.4 billion.
Looking ahead, CEO Safra Catz expects Oracle’s cloud growth to accelerate meaningfully in fiscal 2026. She noted, “Cloud Infrastructure growth rate is expected to increase from 50% in FY25 to over 70% in FY26. And RPO is likely to grow more than 100% in FY26.”
Buoyed by this outlook, Oracle shares hit record highs, rising 5% to close at $229.98 on Monday. The stock has jumped more than 35% over the past month, lifting Oracle’s market capitalization to $646 billion.
In doing so, Oracle stock has significantly outperformed the broader stock market, with the S&P 500 Index up 4% over the past month and the Nasdaq Composite Index gaining nearly 6%.
The strong momentum prompted analysts at Stifel to upgrade their rating on Oracle to Buy from Hold, citing the company’s robust capital spending and growing cloud backlog as drivers of “sustainable” top- and bottom-line growth.
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