- Large enterprise deals won on back of new Gen2 infrastructure
- Oracle struggling to build capacity quickly enough to cope with demand
- Stock hits new all-time $129 high after 13% overnight surge
Enterprise database giant Oracle (ORCL:NYSE) is fast becoming an AI (artificial intelligence) giant. In extended trading overnight, shares in the Austin, Texas-based company surged 13% to an all-time $129 record, putting 2024 year-to-date gains at 24%.
This is on top of a near-30% rally last year as investors bet that AI can lever a new age of growth for the software business.
THIRD QUARTER FORECAST BEAT
Oracle reported third quarter (to end Feb) EPS (earnings per share) of $1.41, $0.03 better than the $1.38 forecast by analysts, while revenue was also narrowly stronger than predicted. Oracle posted Q3 sales at $13.3 billion versus the consensus estimate of $13.29 billion, effectively an outperformance of $100 million.
That was a little more than 7% up on last year’s Q£ $12.4 billion.
The company also declared a quarterly cash dividend of $0.40 a share.
LARGE ENTERPRISE CLOUD DEALS
‘Large new cloud infrastructure contracts signed in Q3 drove Oracle’s total remaining performance obligations up 29% to over $80 billion — an all-time record’, said Oracle chief executive Safra Catz in a statement announcing the results, with the promise of more of the same to come.
‘We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply — despite the fact we are opening new and expanding existing cloud datacentres very, very rapidly’, Catz said.
