Oracle dividend growth signals new era for cloud titan

Valued at a market cap of $460 billion, database giant Oracleraised its quarterly dividend in 2025 while recently announcing plans to raise $50 billion for AI infrastructure buildouts, CNBC reported. 

That combination tells you everything about where this 47-year-old tech company stands today. Most companies pick one lane. Oracle is racing down both.

The Redwood City-based tech titan announced in December that its Remaining Performance Obligations (RPOs) skyrocketed 438% to $523 billion.

It signed major AI cloud deals with Nvidia, Meta, OpenAI, AMD, and TikTok, which fundamentally changed its growth trajectory overnight.

Is Oracle’s dividend payout under threat?

A company’s dividend payout is tied to its free cash flow. Typically, the company should generate sufficient free cash flow to pay shareholders a dividend, reduce its balance sheet, and pursue accretive acquisitions. 

Oracle is investing heavily in capital expenditures and is forecast report a free cash outflow of $23 billion in fiscal 2026 (ended in May). Moreover, its free cash outflow is also projected to surpass $35 billion over the next two fiscal years. 

More Dividend Stocks:

• Did HP just issue stark dividend darning for investors?
• High cash flow tech giant set to raise dividends through 2030
• Amazon rival pays 5.6% dividend despite retail slump

Comparatively, Oracle’s annual dividend expense is around $5.75 billion. 

The tech giant’s widening debt balance and rising capital expenditures have made investors nervous, driving ORCL stock lower by 51% below all-time highs. 

However, analysts forecast Oracle’s annual dividend per share to increase to $3.05 per share in fiscal 2030. 

Oracle's dividend metrics: By the numbers

• Current Quarterly Dividend: $0.50 per share
• Annual Dividend: $2.00 per share
• Dividend Yield: Approximately 1.5% (based on current stock price)
• 10-Year Dividend Growth Rate: 12.8% CAGR

Oracle’s AI infrastructure bet

Oracle isn't just maintaining its dividend. The company is doubling down on a massive infrastructure initiative that dwarfs anything it has done before.

• Earlier this month, Oracle said it planned to raise between $45 billion and $50 billion during calendar year 2026, according to CNBC.
• The funds will support additional capacity for cloud customers who have already signed contracts totaling hundreds of billions of dollars.
• The tech behemoth secured construction loans for data centers in New Mexico and Wisconsin through a consortium of banks. 

Principal Financial Officer Doug Kehring addressed investor concerns head-on during the December earnings call. He committed to maintaining Oracle's investment-grade debt rating.

"There are other financing options through customers that may bring their own chips to be installed in our data centers and suppliers who may lease their chips rather than sell them," Kehring explained.

Customer financing arrangements in which clients bring their own chips reduce Oracle's upfront capital requirements.

Supplier lease agreements for chips, rather than purchases, smooth out cash flow timing. Construction loans tied to specific data centers mean Oracle doesn't pay until facilities are delivered.

CEO Larry Ellison emphasized during the October analyst meeting that Oracle carefully matches expenses to revenue ramps. As new data centers come online and customers start paying, cash flow improves.

Oracle's $225 billion revenue target 

Oracle updated its long-range financial outlook at the October event. The company now targets$225 billion in revenue by fiscal year 2030, up from $57.4 billion in fiscal 2025. 

That represents a compound annual growth rate of more than 31% for the next five years. Revenue and earnings would both grow nearly 4x from current levels.

Related: Bank of America resets Oracle stock price target

For context, Oracle last grew this fast organically over 15 years ago. Among S&P 500 companies with more than $50 billion in revenue, fewer than five are growing faster than Oracle right now.

Cloud infrastructure revenue hit $4.1 billion in Q2, up 66% year over year. GPU-related revenue exploded 177%. Cloud database services revenue climbed 30%.

They represent fundamental shifts in how enterprises buy technology.

What's next for ORCL stock investors?

Oracle's dividend safety depends on execution. The company needs to successfully convert its $523 billion backlog into revenue while maintaining margins.

Early signs look promising. Cloud revenue now accounts for half of Oracle's total revenue, up from 20% in fiscal 2020. Revenue growth is accelerating, not decelerating.

Oracle also benefits from having customers locked into multi-year contracts. These aren't speculative deals. Meta, Nvidia, and OpenAI signed agreements guaranteeing billions in spending over specific time periods.

The dividend has increased by nearly 13% annually over the past decade, significantly enhancing the yield at cost. 

Given consensus price targets, Oracle stock trades at a discount 85% in February 2026. Out of the 33 analysts covering ORCL stock, 26 recommend “strong buy,” seven recommend “hold,” and none recommend “sell”. 

For income investors, Oracle offers an unusual combination: a steadily growing dividend backed by explosive growth potential in AI infrastructure.

The company isn't choosing between returning cash to shareholders and investing in growth. It's finding ways to do both.

Related: Oracle just made a power move Wall Street can’t ignore