Oracle’s growth targets assume a major expansion in demand, but a recent customer decision has put a more immediate question in focus: whether the company can keep its AI computing capacity in use as customers’ technical needs change.
At its investor day on October 28, Oracle set a target of at least 225 billion $ in revenue for FY30, an adjusted non-GAAP operating margin of at least 40%, and adjusted non-GAAP earnings per share of at least 21 $. It also expects free cash flow to turn positive in the second half of FY28 and is aiming for at least 30 billion $ in FY29. Those are company targets, not results already achieved.
The customer issue emerged after Bloomberg reported yesterday that Microsoft would let its agreement to rent AI computing capacity from Oracle expire rather than renew it. Reuters, which cited the report, said the capacity used older Nvidia chips and no longer matched Microsoft’s requirements. Oracle, by contrast, says demand for its OCI AI infrastructure remains strong, including for earlier generations of GPUs.
The stock response was not uniform across the reports. Reuters reported losses in Oracle shares during Friday afternoon trading after the Microsoft news; the shares ended Friday up 1.5%. On Thursday, Oracle had also been caught in a wider sell-off in stocks linked to AI data centers. AP attributed that sector pressure to concerns about financing costs, high AI valuations and possible restrictions on data-center construction after the US midterm elections, including potential building stoppages.
For Oracle, the distinction is between demand in general and demand for particular configurations. The company’s claim that older GPUs still attract customers would matter if it translates into continuing use of capacity that no longer suits Microsoft. The Microsoft report, meanwhile, highlights the risk that a customer’s changing technical requirements can leave a specific offering less useful to that customer.
Expanding the customer and product mix
Oracle has pointed to several routes to broaden the potential uses of its infrastructure. On October 27, it announced an expanded collaboration with OpenAI, linking OpenAI models, ChatGPT and Codex with Oracle applications, data and cloud infrastructure. The same day, media reports said Oracle planned to scale its Nvidia AI server plans using Vera Rubin systems to several gigawatts. The company also plans to offer chips from Google, SambaNova and Cerebras; no contract value was disclosed.
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That expansion sits alongside a separate financing move. On Wednesday, Oracle completed a capital raise by placing 10 billion $ of common stock and issuing 10 billion $ of senior bonds. Whether the additional financing supports infrastructure with durable customer demand remains central to the investment case.
There are also potential limits on where Oracle can place its capacity. The Financial Times reported on Wednesday that Oracle had called off a reported chip-leasing agreement with Tencent after concerns from US government officials. The proposed deal was to run for five years and be worth 7 billion $, with access to as many as 100,000 advanced AI chips in Southeast Asian data centers. Reuters initially could not independently confirm the report, and Oracle, Tencent and the White House did not respond to requests for comment.
If confirmed, the reported Tencent decision would add political constraints to the technical fit questions raised by Microsoft. Separately, Oracle said on Monday that it would no longer require state and local authorities to sign nondisclosure or confidentiality agreements for its AI data-center projects.
The next scheduled shareholder event is Oracle’s virtual annual meeting on November 18, 2026. Investors will be watching for further detail on the company’s infrastructure strategy and customer developments. The OpenAI collaboration and broader chip plans could provide additional avenues for use; the Microsoft and Tencent reports underscore that capacity must still find customers under changing technical and political conditions.
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