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Oracle Corp (NYSE:ORCL) is emerging as the fourth major hyperscaler, expanding its artificial intelligence-driven data center footprint to rival other big tech giants.
Fueled by more than $300 billion in planned capital spending by 2030, Oracle is building an AI-native cloud business with predictable cash flows from long-term compute contracts, according to Bank of America Securities analyst Brad Sills.
With a Buy rating and a price forecast of $368, Sills says Oracle is transforming into a fourth major hyperscaler.
Also Read: Wall Street Divided As Oracle’s $225 Billion Growth Vision Sparks Optimism — And Concern
The strategy aligns its data center footprint with industry leaders, including Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT), and Alphabet Inc (NASDAQ:GOOGL).
Oracle's accelerated investments in GPU infrastructure and data center capacity position it to compete better, Sills adds. The growing AI compute market will likely reach $200 billion in annual spending by 2028 (as per IDC). This implies a 42% five-year compound annual growth rate.
He estimated Oracle's cumulative capital expenditures will exceed $300 billion by fiscal 2030.
Addressing investor concerns about profitability, Sills said Oracle's AI infrastructure projects can deliver attractive returns, citing Bank of America's proprietary analysis of the economics of Oracle's OpenAI deployment.
The analyst added that Oracle's financing strategy significantly reduces execution risk. The company has funded most of its AI infrastructure projects through low-cost debt, including an $18 billion bond issuance in September and another $38 billion offering planned for this week. Both carry a cost of capital well below the projected IRRs, improving the economics of Oracle's AI expansion.
Sills also highlighted Oracle's contract discipline, noting that the company structures its AI compute agreements as non-cancelable, take-or-pay contracts that guarantee stable, predictable cash flows and cost visibility—unlike rival hyperscalers building speculative capacity.
Sills projected fiscal 2026 sales of $67.66 billion and EPS of $6.85.
ORCL Price Action: Oracle shares were up 0.15% at $283.81 at the time of publication on Monday.
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