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Oracle shares jumped in late trading on Tuesday after the company issued optimistic forecasts and announced cloud partnerships with OpenAI and Google (GOOGL). The strong increase came despite fourth-quarter earnings and revenue for oracle (ORCL) is easier than expected.

Oracle reported adjusted earnings of $1.63 per share on revenue of $14.3 billion. On average, analysts expected the Austin, Texas-based company to report adjusted earnings of $1.65 per share on revenue of $14.56 billion. In the same fourth quarter last year, Oracle reported earnings of $1.67 per share and revenue of $13.8 billion.

Along with its findings, Oracle announced that it would expand its partnership with Microsoft Azure to include training of OpenAI’s ChatGPT models. The company also announced a partnership with Google to offer cloud services.

Oracle shares rose 9% after hours.


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Updated 5:58 p.m. ET

Oracle CEO: We are working “as fast as we can” to meet cloud demand

Oracle’s share price rose about 9% during the company’s just-concluded conference call for analysts.

CEO Safra Catz told analysts she expected Oracle’s revenue to rise between 6 and 8 percent in the quarter. Analysts had forecast revenue growth of 7.5 percent for the quarter ending in August before the report was released, according to FactSet.

However, Catz also said the company is forecasting double-digit revenue growth for fiscal 2025, which is above analyst forecasts. The company also expects revenue growth to accelerate throughout the year as it expands the capacity of its AI-related data centers.

“We are working as quickly as possible to expand cloud capabilities,” Catz told analysts.

Catz noted that Oracle signed more than 30 AI-related sales contracts totaling $12.5 billion in the fiscal fourth quarter alone, including the deal with OpenAI to train ChatGPT on Oracle Cloud.

Analysts stressed that the company’s forecast was a cause for concern among investors ahead of the report’s release, but Tuesday’s numbers appear to have hit the mark.

Updated 5:44 p.m. ET

Oracle shares: OpenAI deal a “key win”

Before Oracle’s conference call for analysts at 5:00 p.m. Eastern Time, analysts provided initial assessments of Oracle’s results.

Barclays analyst Raimo Lenschow said the company’s AI news and forecasts for fiscal 2025 overshadowed lower-than-expected revenue.

“It is true that Q4 revenues were missed due to weak licenses, but we believe the strong RPO growth (44% year-over-year), the double-digit revenue growth forecast for FY2025 (8.3% consensus) and the new partnerships with (Google Cloud Platform and Azure/OpenAI) are more relevant,” Lenschow wrote to his clients. Lenschow believes a positive overweight rating on Oracle stock is appropriate.

Evercore ISI analyst Kirk Materne wrote that there are “always some moving parts” in Oracle’s earnings reports, but the results appear to be positive for investors optimistic about the growth of Oracle’s cloud infrastructure business.

“The announcement that OpenAI will also use Oracle’s infrastructure is an important victory for Oracle’s credibility as an infrastructure platform in an AI world,” wrote Materne. Materne rates Oracle stock as a positive outperform.

Updated 5:04 p.m. ET

Oracle shares: CEO promotes demand for AI

The optimistic comments from Oracle CEO Safra Catz are likely to benefit Oracle shares despite the failure in the fourth quarter.

“In the third and fourth quarters, Oracle signed the largest sales contracts in our history – driven by enormous demand for training large AI language models in the Oracle Cloud,” said Oracle CEO Safra Catz in the press release.

Oracle’s much-watched cloud infrastructure business grew revenue 42% year-over-year to $2 billion last quarter. Oracle Cloud Infrastructure provides cloud-based servers, storage and other computing services to other companies. OCI also plays a central role in Oracle’s plan to win the AI ​​business.

In addition, OCI’s remaining performance obligations, or work under contract, increased 44% year over year to $98 billion. This backlog gives the company confidence that it can accelerate revenue growth in its next fiscal year, which ends in May 2025.

“Throughout fiscal 2025, I expect continued strong AI demand to drive Oracle’s revenue and RPO even higher — leading to double-digit revenue growth this fiscal year,” Catz said in the press release. “I also expect each subsequent quarter to grow faster than the previous quarter — as OCI capacity begins to keep pace with demand.”

The double-digit sales growth exceeds previous analyst forecasts. On average, analysts expect sales to increase by 8.5% to $57.8 billion for the 2025 fiscal year, FactSet reports.

Updated 4:20 p.m. ET

Positive news from the cloud and AI

Oracle highlighted positive trends for its cloud infrastructure business, including a growing partnership with Microsoft’s Azure cloud division that will see Oracle host workloads for ChatGPT developer OpenAI.

“Our multicloud collaboration with Microsoft expanded significantly in the fourth quarter as we agreed to jointly support Open AI and ChatGPT – and 11 of the 23 OCI data centers we are building in Azure came online,” said Larry Ellison, Oracle’s chairman and chief technology officer, in a statement. “Because this Azure/OCI cloud capacity is available to the large installed base of Microsoft and Oracle customers, it will accelerate our cloud database growth.”

Shortly before Oracle announced its results on Tuesday, OpenAI announced that the company would seek additional computing capacity through Oracle Cloud Infrastructure (OCI).

“OCI will extend the Azure platform and enable OpenAI to continue to scale,” said OpenAI Chief Executive Sam Altman in the press release.

Oracle also announced a deal to provide cloud services in partnership with Google.

Updated 3:45 p.m. ET

Oracle stock on IBD Live: “As a kind of indicator, it’s worth keeping an eye on.”

Oracle was featured on Tuesday’s edition of IBD Live.

IBD Live host Justin Nielsen said Oracle stock is “kind of an indicator to keep an eye on, whether you’re going to buy it or not.” News editor Ed Carson said a key focus for investors will be Oracle’s cloud business, which is trading at Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL).

“It took forever for this company to show any kind of revenue growth,” Carson said. “It just seemed like it couldn’t get big enough for the cloud, so there are interesting things here.”


Oracle’s share price remained unchanged and declined slightly towards the end of the trading session.

Oracle stock: Numbers to keep an eye on

For the quarter ending in May, analysts forecast Oracle’s adjusted earnings to be $1.65 per share, down 1 percent from the previous year. Revenue is expected to rise 5.5 percent to $14.6 billion, according to FactSet.

The quarter marks the end of Oracle’s fiscal year 2024.

Following its last earnings report in March, Oracle forecast revenue growth of about 5% for the fourth fiscal quarter.

Collapsing software stocks

Oracle’s earnings come at a time when software stocks are struggling in general. A list of companies, including Foreclosure (CRM), working day (WDAY) and database competitor MongoDB (MDB) suffered sharp declines late last month following disappointing earnings reports.

“Sentiment in the software sector remains negative, with broad-based weakness in front- and back-office applications (CRM/WDAY warns of difficult macroeconomic situation),” Jefferies analyst Brent Thill wrote to his clients on Tuesday ahead of the release of the Oracle report.

Thill, who has a buy recommendation for Oracle, noted that the trends for cloud infrastructure are better, with both Amazon (AMZN) and Microsoft (MSFT) reports strong cloud results for March quarters.

Thill wrote in a note to clients on Tuesday that investors will be paying attention to commentary on AI. A focus will also be on Oracle’s guidance for fiscal 2025, Thill wrote.

Oracle typically provides guidance in a conference call with analysts following its report.

On average, analysts expect Oracle’s revenue to rise 8.5% to $57.8 billion in its next fiscal year, which ends in May 2025, according to FactSet.

Oracle Stock: Technical Ratings

Oracle shares have gained 20% overall this year, outperforming the S&P 500’s 12% gain. Oracle’s stock price rose after it reported better-than-expected third-quarter results in March.

Ahead of the fourth-quarter report, Oracle stock formed a cup pattern with a potential buy point at 132.77, according to MarketSurge.

Oracle shares were unchanged at 124.37 on the stock exchange today. The shares have gained 18% this year and 15% in the last 12 months.

Before the report was released, Oracle stock had an IBD Composite Rating of 79 out of a possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into a single score. The best growth stocks have a Composite Rating of 90 or better.

Additionally, Oracle’s IBD Relative Strength Rating was 62 out of 99.

Follow Ryan Deffenbaugh on X (formerly Twitter) at @ryanddeff for more articles on data social media, e-commerce and data software stocks. IBD writer Benjamin Pimentel contributed to this report.


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