Oracle: Another OCI Revenue Outlook Raise Shows Ability to Capture AI Momentum

Key Morningstar Metrics for Oracle

• Fair Value Estimate: $340
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

On the week of Oct. 13, Oracle ORCL held its AI World conference and provided several updates to its database and enterprise software lineup. Additionally, management raised the fiscal 2030 Oracle Cloud Infrastructure revenue target to $166 billion, from $144 billion previously.

Why it matters: We view 2025 as a transformational year for Oracle, where a continuous commitment to product buildout has turned the company into one of the very few artificial intelligence powerhouses with capabilities across infrastructure, data, and application layers.

• AI gave Oracle a second opportunity to expand its cloud business, and this time, we are glad to see the company holding a well-rounded product mix that directly tackles customer pain points in cloud and data, eventually putting Oracle on top of the AI wave.

The bottom line: We raise our fair value estimate for wide-moat Oracle to $340 per share, from $330 previously, after incorporating management’s latest guidance. We view shares as undervalued following today’s 3% rally.

• Oracle’s infrastructure, database, and enterprise software are among the few full-suite offerings that can unlock insights across public and private data. Seamless, reliable, and secure integration across different systems should produce very strong switching costs for customers.
• However, strong switching costs do not always work in vendors’ favor if enterprises get wary of potential lock-in effects. There is more work for Oracle to show how different pieces of its portfolio can drive larger business gains when used as a bundle.

Key stats: OCI’s $166 billion fiscal 2030 revenue goal means 75% annualized growth over the next five years. Besides the AI tailwind, synergy across Oracle’s portfolio should also fuel high growth.

• Besides a long-term revenue outlook for OCI, management also provided a companywide fiscal 2030 revenue guidance of $225 billion and a non-GAAP EPS guidance of $21. Both of which were a tad higher than our updated forecasts.