Oracle Corp. shares rallied significantly after the company projected $30 billion in free cash flow by fiscal 2029 and reaffirmed a staggering 35% average annual revenue growth rate through 2030.
- Oracle projected its long-term financial guidance presented at its annual investor conference in Las Vegas.
- The software giant expects to reach $30 billion in free cash flow by the fiscal year ending in May 2029, returning to positive cash flow by late fiscal 2028.
- Oracle committed to capping additional fundraising through May 2030 at $20 billion, split evenly between equity and debt.
Oracle Corp. (ORCL) share price rallied about 11% on Wednesday, closing its best day since May this year, after executives unveiled a net cash-flow-positive outlook, helping alleviate capex concerns.
ORCL stock has been under pressure so far this year amid mounting concerns that ballooning debt loads and high interest rates would make the tech titan’s heavy AI investments unsustainable.
Chief Financial Officer Hilary Maxson announced that Oracle expects to achieve $30 billion in free cash flow by the fiscal year ending in May 2029 at its investor day in Las Vegas. The forecast heavily outperformed Wall Street expectations, as data compiled by Bloomberg and FactSet indicated that analysts anticipated the metric to remain deeply negative during that period.
Massive Revenue Targets
Fueling the optimism is a robust revenue trajectory. Oracle reaffirmed its target of $225 billion in total revenue by fiscal 2030, signaling an average annual growth rate of roughly 35%. Operating margins are projected to climb past 40% by the end of the decade.
To manage the heavy capital expenditures required for the build-out, Oracle outlined a disciplined funding strategy, which included a pledge to limit total additional funding needs between fiscal 2027 and 2030 to $20 billion, split evenly between equity and debt.
Expanding Data Centers For OpenAI
The company is executing a massive data center build-out to support major clients like OpenAI, stepping into direct competition with established hyperscalers like Amazon (AMZN) and Google (GOOGL).
Maxson noted that Oracle plans to deliver an additional seven gigawatts of data center capacity over the next couple of years, pushing its total fleet capacity beyond 10 gigawatts by the conclusion of fiscal 2028. To put the scale in perspective, a single gigawatt of electricity generates enough power for about 750,000 U.S. homes at once.
While Oracle hit negative $23.7 billion cash flow in the fiscal year ending May 2026 due to infrastructure costs, executives emphasized that capital expenditures will peak through the current and upcoming fiscal years before declining significantly in fiscal 2029.
ORCL Stock: Retail View
Retail sentiment on Stocktwits was ‘bullish’ with ‘high’ message volumes. Retail investor chatter around the stock surged about 154% over the previous session and is up 170% over the past week.
However, one user was skeptical about whether Oracle could compete with hyperscalers like Amazon and Google.
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ORCL stock has lost about 26% year-to-date.
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