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The central theses

  • Oracle reported fourth-quarter earnings and revenue that fell short of analysts’ expectations, but announced major cloud infrastructure deals with Microsoft, OpenAI and Alphabet’s Google.
  • The company’s revenue increased compared to the same period last year, but fell short of analysts’ expectations. Profit also declined compared to the same period last year, missing estimates.
  • Oracle announced a partnership with Microsoft and OpenAI that extends Microsoft’s cloud platform Azure AI to Oracle Cloud Infrastructure (OCI), as well as an agreement with Google Cloud.

Oracle (ORCL) reported fourth-quarter revenue and earnings that fell short of analyst estimates, but announced major cloud infrastructure deals with Microsoft (MSFT), OpenAI and Alphabet’s (GOOGL) Google Cloud for artificial intelligence (AI) data centers, sending Oracle’s stock price up over 9% in extended trading Tuesday.

Oracle reported revenue of $14.29 billion for the fourth fiscal quarter of 2024, up 3% from the same period last year but below analysts’ expectations, according to estimates from Visible Alpha.

Net income was $3.14 billion, or $1.11 per share, down from $3.32 billion, or $1.19 per share, in the same period last year. This figure was also below analysts’ forecasts.

Q4 FY24 Analyst estimates for Q4 FY24 Q4 FY23
revenue 14.29 billion US dollars 14.57 billion US dollars 13.84 billion US dollars
Diluted earnings per share 1.11 USD 1,17 € 1,19 €
Net income 3.14 billion US dollars 3.31 billion US dollars 3.32 billion US dollars

Oracle announced a partnership with Microsoft and ChatGPT maker OpenAI to extend Microsoft’s cloud platform, Azure AI, to Oracle Cloud Infrastructure (OCI) and provide additional capacity for OpenAI.

“We are excited to partner with Microsoft and Oracle. OCI will extend the Azure platform and enable OpenAI to continue to scale,” said Sam Altman, CEO of OpenAI.

“In the third and fourth quarters, Oracle signed the largest sales contracts in our history – driven by tremendous demand for training large AI language models in the Oracle Cloud,” said Safra Catz, CEO of Oracle, adding that she “expects each subsequent quarter to grow faster than the previous quarter – as OCI capacity begins to keep pace with demand.”

“In the fourth quarter alone, Oracle signed over 30 AI sales agreements totaling over $12.5 billion – including one with Open AI to train ChatGPT on the Oracle Cloud,” said Catz.

The company also announced that it “recently signed an agreement with Google to connect our clouds – initially building 12 OCI data centers within Google Cloud. We expect Oracle Database to be available on Google Cloud in September of this year.”

Following the announcement, Oracle shares rose over 9% to $135.25 in extended trading at 4:50 p.m. ET on Tuesday.

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