According to the Zhitong Finance APP, Oracle Corporation (ORCL.US) recently held an &#34;Analyst Day&#34; event, during which it announced ambitious long-term financial goals driven by the continued rise in demand for artificial intelligence (AI) applications and infrastructure. This plan has received widespread positive evaluations from analysts, with Goldman Sachs and Piper Sandler recently releasing related reports and raising their target prices.
At the &#34;Analyst Day,&#34; Oracle announced its long-term financial goals for fiscal year 2030 (FY30): annual total revenue is expected to reach $225 billion, corresponding to a five-year compound annual growth rate (CAGR) of 31%; the diluted earnings per share (EPS) target is $21, with a five-year CAGR of 28%. Among these, the Oracle Cloud Infrastructure (OCI) business, as the core growth engine, has raised its revenue target from the previous $144 billion to $166 billion, accounting for nearly 75% of its total revenue, an increase of over 15%.
Oracle's co-CEO Clay Magouyrk also disclosed details about the gross margin of the AI data center GPU computing power sales business:
&#34;For example, what would happen if a customer wanted to purchase about 1 gigawatt of GPU accelerators?&#34; Magouyrk stated, &#34;If that customer signs a six-year contract, with an annual value of $10 billion, the total contract value (TCV) would reach $60 billion.&#34;
He further broke down the cost structure: &#34;I divide the relevant costs into two parts. The first part I call 'site, data center, and power costs,' which obviously includes building facilities, actual power generation costs, and the labor costs required to operate this part of the business—this part of the cost ultimately accounts for about 35% of the total cost of service delivery.&#34;
Magouyrk added, &#34;The second part is computing, networking, and storage costs, which are the costs of all the equipment we deploy inside the data center, accounting for about 65% of the total cost... But it should be clear that the 35% gross margin I mentioned does not only cover each year after the business is operational. This 35% gross margin actually includes the initial startup costs.&#34;
&#34;It is clear that one can imagine that if we take the first year of business startup as a dividing point, we will incur expenses before the startup, but at that time we have not yet generated corresponding revenue. Moreover, this situation will occur at multiple project locations—we are not just building one such data center, but are simultaneously advancing the construction of 10 or 20 projects.&#34;
<h2>Multiple major banks are optimistic, but some analysts warn of risks</h2>
Piper Sandler analysts Hannah Rudoff and J.R. Herrera pointed out in an investor report released last Friday: &#34;The highly anticipated Analyst Day event from Oracle disclosed updated long-term goals, including revenue reaching $225 billion in fiscal year 2030 (FY30)—which implies a five-year compound annual growth rate (CAGR) of 31%, higher than our previous estimate of about 20%.&#34;
The report further explains: &#34;The core supporting this goal is the strong growth expectations for the cloud infrastructure business: the compound annual growth rate (CAGR) of operating cash flow (OCI) for this business is expected to reach as high as 75% over five years, driving its fiscal year 2030 revenue scale to $166 billion (up from the previous expectation of $144 billion).&#34;
Based on the above judgment, Piper Sandler reiterated its &#34;Overweight&#34; rating on Oracle and raised its target price from $330 to $380.
In addition to Piper Sandler, Guggenheim also raised Oracle's target price from $375 to $400; T.D. Cowen similarly raised its target price from $375 to $400.
However, analyst Kevin Anthony D. Arroyo pointed out that Oracle faces risks in achieving these high targets. Specifically, the company's business is overly reliant on OpenAI—about two-thirds of Oracle's nearly $500 billion in undelivered orders come from this startup led by Sam Altman.
Arroyo emphasized: &#34;This poses significant customer concentration risk for Oracle, especially considering that OpenAI is currently not profitable.&#34;
In an analysis report released last Thursday, he further explained: &#34;According to the agreement, OpenAI will enter into an 'infrastructure leasing' cooperation model with Oracle Cloud Infrastructure (OCI). For OpenAI, this means an annual expenditure of about $60 billion; if calculated over a five-year agreement, the total amount will reach $300 billion, and the agreement will take effect in 2027. But the question is, how will OpenAI pay this fee, or even maintain this cooperation?&#34;
<h2>Goldman Sachs gives a &#34;Neutral&#34; rating, raises target price to $320</h2>
Goldman Sachs released a research report on Oracle on October 17, reiterating a &#34;Neutral&#34; rating while raising the 12-month target price from $310 to $320. As of the close on October 16, 2025, Oracle's stock price was $313, indicating that the potential upside corresponding to the target price is only 2.2%. The report noted that Oracle's long-term growth targets are attractive, but execution uncertainty and financial risks lead to an overall risk-return balance, thus maintaining a neutral rating.
Oracle provided a positive outlook on future prospects during Analyst Day, and in the short term, Goldman Sachs also has clear forecasts for Oracle's financial performance for fiscal years 2025-2028: total revenue is expected to gradually increase from $57.399 billion in fiscal year 2025 to $115.583 billion in fiscal year 2028; diluted EPS is expected to rise from $6.03 to $10.05, but the gross margin is expected to show a declining trend year by year, dropping from 72.0% to 58.1%, reflecting cost pressures during the business expansion process.
Goldman Sachs stated that the OCI business is key to supporting Oracle's long-term goals and analyzed it from three aspects: growth drivers, customer expansion, and segment performance. The core growth driver is the explosive demand for AI infrastructure—OCI, with its Acceleron network architecture (equipped with dedicated Ethernet network cards), can deploy large-scale AI GPU clusters more efficiently while reducing costs, aligning with market demand for AI training and inference
In terms of customer expansion, Oracle achieved a breakthrough in the second quarter of fiscal year 2025 (F2Q), adding four non-OpenAI customers (including Meta), with a total contract value (TCV) of infrastructure business reaching $65 billion, effectively alleviating previous reliance on a single customer.
In terms of performance in segmented areas, all four major sectors of OCI achieved high growth: AI Infrastructure had the highest year-on-year growth rate at 117%, with a gross margin of 30-40%; Distributed Cloud grew by 77% year-on-year, with a gross margin of 40-60%; Cloud Natives grew by 49% year-on-year, with a gross margin of 40-60%; and Enterprise business grew by 33% year-on-year, with a gross margin of 65-80%, making it the sector with the highest profitability.
Additionally, Goldman Sachs disclosed the cost structure of typical OCI contracts (such as a 6-year $60 billion TCV AI infrastructure order) in its report: land, data centers, and electricity costs account for 35% of total costs (including initial startup costs), while computing, networking, and storage costs account for 65%, resulting in an overall gross margin of approximately 35%.
Aside from OCI, Goldman Sachs believes that Oracle's AI and Agent ecosystem, as well as its full-stack SaaS strategy, also constitute important growth supplements. In the AI field, Oracle has deployed over 600 Agents (including more than 400 from Fusion ERP and over 200 from vertical industries). When including Agents developed by customers and partners, the actual scale is even larger; on the implementation front, 2,400 customers have activated industry AI Agents within 18 months, with deployment cycles of only a few days and no need for professional services or training.
In the SaaS field, Oracle promotes a &#34;database + data platform + OCI&#34; full-stack architecture, with customers using this architecture having annual recurring revenue (ARR) 150 times higher than those using only a single product; the company plans to extend the Universal Credits model from OCI to the application layer, further lowering the threshold for customer AI applications and driving business penetration.
The report also emphasizes four core risks faced by Oracle, which are key reasons for maintaining a neutral rating. First is execution risk, as uncertainties exist in the data center construction cycle, GPU procurement volume and pricing, and energy costs after fiscal year 2027, which may affect the pace of business delivery.
Second is customer concentration risk, as approximately two-thirds of Oracle's nearly $500 billion in undelivered orders come from the unprofitable OpenAI, and there are concerns about payment capability and sustainability regarding its five-year $300 billion infrastructure leasing agreement with OpenAI (effective from 2027).
Third is financial pressure, as high capital expenditures (CapEx) are expected to lead to negative free cash flow from fiscal years 2026 to 2028, which will drag down EPS growth and operational leverage release. Fourth is market competition risk, as Oracle has continuously lost market share in the database market over the past decade, with its IaaS business still ranking fourth in market share, trailing behind leading companies such as AWS, Azure, and GCP

ORCL

Oracle Corporation announced its long-term financial goals during the "Analyst Day" event, expecting total revenue to reach USD 225 billion in fiscal year 2030, with a five-year compound annual growth rate of 31%. Analysts generally gave positive evaluations, with Goldman Sachs and Piper Sandler raising their target prices. The revenue target for the core growth engine, Cloud Infrastructure (OCI), was raised to USD 166 billion, accounting for nearly 75% of total revenue. Despite the optimistic outlook, the risk of customer concentration still needs attention

Oracle's ambitious goals receive positive evaluations from analysts, but concerns about customer concentration risk remain