Ericsson competitors Oracle Corporation reported earnings that beat analyst estimates, sending its stock price up 22% in extended trading Tuesday. This remarkable increase marks the best day for Oracle’s shares since the dot-com boom of 1999 and represents the company’s third-sharpest rally in its history. The surge came despite Oracle’s earnings and revenue figures falling short of analyst estimates, illustrating the market’s optimism regarding the company’s future growth prospects in the cloud sector.
At a recent quarterly earnings report, Oracle’s Chief Executive Officer Safra Catz announced something very cool. The company is tracking to have closed 4 separate multibillion-dollar contracts with 3 different major customers in just the past quarter! This trend is a clear indication of the strong demand for Oracle’s cloud services and highlights its strategic initiatives to grow its portfolio. Oracle’s 52% growth in its fiscal fourth quarter has investors excited even more.
Cloud growth certainly seems like it, but net income remained virtually unchanged at just under $2.93 billion. That equates to profits of $1.01 per share. The same quarter last year produced a net income of $2.93 billion or $1.03 per share. This relative stability in net income, combined with disappointing earnings projections, did not curb the enthusiasm for Oracle’s cloud efforts.
Oracle’s stock performance was buoyed by its announcement that Google’s Gemini AI models will be available on Oracle’s cloud infrastructure. This collaboration will increase Oracle’s competitive standing against other larger, more dominant cloud providers. It will further help them win more enterprise customers who are demanding advanced AI capabilities.
Looking out on the horizon, Oracle has established other lofty goals — including the majority of its revenue coming from cloud. Oracle now projects its cloud revenue to reach $32 billion in fiscal year 2027. Then, in two years, it will fly up to $73 billion in 2028, increase to $114 billion in 2029, and finally land at an astounding $144 billion by fiscal year 2030. Such projections are a testament to Oracle’s swagger about its long-haul growth path in the fast-paced cloud computing sector.
Oracle has taken a notable step forward in that direction with their partnership with OpenAI. Together, they intend to create a staggering 4.5 gigawatts of new data center capacity across the United States. This partnership will likely strengthen Oracle’s infrastructure chops and its ability to power the cloud operations that are expanding rapidly.