Oracle Repeats 2026 Outlook, Signs $1.5B AI Contract With a Cloud Provider

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Oracle

He reiterated his previous forecast of $65 billion in fiscal year revenue in May 2026.

At a meeting with stock analysts in Las Vegas, where the company hosts its annual Oracle Cloud World conference, Oracle (ticker: ORCL ) executive vice president of corporate operations, Doug Kehring, reiterated the company’s forecast for $65 billion in revenue and 45% operating margins. And at least 10% annual earnings per share growth by 2026. “We are confident that we are on track to achieve these goals,” he said.

Kehring Oracle estimates revenue growth of 8 percent in fiscal 2024 excluding the company’s Cerner electronic health records business, or 7 percent including Cerner. In the year Non-GAAP operating margin should reach 43 percent in 2024, up from 42 percent in fiscal 2023, he said.

During a question-and-answer session, Oracle CEO Safra Catz was asked about the selloff in the company’s shares following the company’s latest earnings announcement, which included the biggest one-day decline in two decades. Katz said she sees the drop as an opportunity to buy the stock. “We’re going to continue to go private one share at a time,” she said. “I can never outrun the market.”

Katz added that demand for capacity in the company’s cloud computing business remains strong. “We are overwhelmed with demand…we are very happy here. People can’t get to us fast enough. This is what is happening. We are very satisfied with how we are playing throughout the year.

Oracle co-founder and chief technology officer Larry Ellison answered questions at the event. The company They were asked if they believe that they will be able to reach the forecast in the 2026 fiscal year.

“My goals are very different,” Ellison said. “I mean very different from this.” A few years ago, he said the company’s biggest customer paid $120 million a year to Oracle. “I’d say it’s going to be a rare quarter without them signing a deal over $1 billion right now,” he said. “Now we have multi-billion dollar clients.”

Ellison revealed that Oracle has signed a $1.5 billion deal with one of the three largest cloud computing providers to develop AI training in the cloud.

Amazon
,

Microsoft

Or the letter—”Because our price was less than theirs.” Ellison says Oracle offers AI training at half the cost of other clouds. “It’s actually better than that, much, much better than that,” he said. “There is no end to all this.”

Ellison was also asked if the company could get enough GPU chips from Nivea to expand its cloud computing business. In response, he recounted a recent dinner at Nobu in Palo Alto with NVIDIA CEO Jensun Huang and Tesla CEO Elon Musk. He said he and Mook spent the evening eating sushi and “begging.” He said that while Oracle is “ahead of everyone else,” there are still “not enough” chips.

Amid a deep selloff in technology stocks on Thursday, Oracle fell 3.1% to $109.43.

Write to Eric J. Savitz at [email protected]